Panama Beach Realty

Condominium sales in Panama City Beach were down this year in May when compared to May of 2009.  Sixty-four condos sold in 2010, compared to the Seventy-two sales the prior year.  June seamed to pick up the slack with a year over year increase.  Seventy-two condos sold in 2010, compared to the Fifty-nine sales the prior year. 

Sales fell off a cliff in July when compared to July of 2009.  Fifty-six condos sold in 2010 compared to the  Seventy-eight (non preconstruction) condo sales the prior year. 

This summer can be summed up in one word . . . OIL.  Everyone was waiting to see what happened.  Everyone was waiting for the oil that would never come.  I am very thankful that oil has not shown up on our beaches, but the sales volume definitely felt the impact.  That isn't to say nothing sold this summer.  Plenty of foreclosures went under contract in less than a week.  If condos were priced aggressively, they sold.  That is still the case as we continue to move through this market.

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Real estate condominium re-sales in Panama City Beach were up year over year in March when compared to March of 2009.  Seventy-one condos sold in 2010, compared to the Fifty-two sales the prior year.  April also saw a year over year increase with seventy-four condos selling in 2010, compared to the Fifty-nine sales the prior year. 

We are seeing strong sales in developer owned units.  Tropic Winds sold eight units in the past two months while Grand Panama Beach Resort sold fourteen.  The interesting thing about these sales is the prices that these units are selling at.  Tropic Winds is selling at prices 20% higher than identical floor plans across the beach.  Grand Panama Beach Resort is selling at prices 20% higher than Short Sale asking prices in the same building.  Buyers clearly see value in purchasing an new condo.

The Panama City Beach real estate market is clearly trying to recover.  Monthly sales volumes

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In the September 2008 Market update I reported the outstanding developer inventory according to Bay County Records.  I thought I would take another snapshot of the market.  Many things have changed.  Some of the inventory has changed hands.  I am now simply going to refer to the units as "Remaining Units".  A number of the condominiums do not have the ability to sell the remaining inventory freely.  Some are tied up in litigation.  Others are held by institutions or entities that are choosing to hold the inventory.

Most of these condominiums have detailed stories behind the sales and pricing.  I am not going to get into any specifics here.  Aqua, Palazzo, Ocean Reef, Grand Panama, Tropic Winds, and Origin at Seahaven have been selling off inventory.  Aqua and Grand Panama just recently offered new pricing. 

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The February Market update explained how the market is showing strong signs of a bottom on several specific floor plans.  This is not the case for the entire market.  A number of buildings built at the tail end of the preconstruction boom are still seeing prices decline with little or no absorption rate.  Several of these buildings had remaining units after developers tried to close out preconstruction contracts.  Many had auctions or reduced price offerings.  We are now starting to see the short sales and foreclosures of the units that conveyed at the original preconstruction pricing. 

The short sales in this market are a very mixed bag.  Less than half of all short sales actually make it to a closing table.  There are several reasons for this.  Some of the individuals processing the short sale do not have the experience or expertise necessary to complete the transactions.  Other

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The Panama City Beach condominium market is showing strong signs of a bottom on several specific floor plans in a number of buildings.  Some floor plans are 10-15% above a bottom set months prior.  Buyers should also look a bit deeper than the numbers.  I would be much more comfortable spend 200k on a nicely furnished two bedroom than purchasing that same floor plan unfurnished, having mold issues, and other damage at 160k.  The sold prices don't always tell the whole story.  Short Sales continue to be a gamble.  There are some impressive sales going thru.  But, for every success story there seem to be four more contracts that took six months simply to fall apart.  We are also starting to see many foreclosures and short sales selling at or above asking price. 

Our remaining developer inventory continues to decrease.  Shores of Panama continues to sell remaining inventory at a natural absorption rate.  Aqua has sold 31 of its

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As prices come down, sales are increasing in the Panama City Beach condo market.  We have seen three consecutive months of increases sales compared to the prior year.  We are starting to see signs of a clear bottom in many condominium buildings and floor plans. 

Real estate condominium re-sales in Panama City Beach were up in September when compared to September of 2008.  Fifty-one (non preconstruction) condos sold in 2009, compared to the thirty seven (non preconstruction) sales the prior year.  Seventy-one additional condos sold in 2009 at the Island Reserve auction, and eleven additional sales in 2008 were a result of the original preconstruction closings at Island Reserve. 

Real estate condominium re-sales in Panama City Beach were up in October when compared to October of 2008.  Seventy-eight (non preconstruction) condos sold in 2009, compared to the Fifty-five (non preconstruction) sales the prior year.  Three additional condos sold in 2009 at the Island Reserve auction. 

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Several sources across the internet are posting articles about new FHA underwriting guidelines.  The specifics of this new guidance can be found here (FHA Temporary Guidance for Condominium Policy).  Different sources are posting articles with different opinions on these changes.  The Miami Herald is claiming it could boost the condo market:

FHA Moves to Boost Condo Market

The Federal Housing Administration is giving the condo market something it hasn't had for a while -- a little breathing room. Last week, the FHA, the federal agency that insures low-down-payment home loans for private lenders, said it was relaxing its building underwriting guidelines as a way of helping the struggling sector ride out the downturn. The move could help boost sales in condos by making more FHA mortgages available to borrowers.   (Source: Miami Herald)

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Southwest Airlines Co. announced Wednesday it will begin service to Panama City new International Airport next May.

Panama City will be the discount carrier's seventh location in Florida. This is in addition to New York, Boston, Milwaukee and Minneapolis added earlier this year. This expansion continues Southwest eliminates other flights and shrinks capacity overall due to the slump in air travel.

CEO Gary Kelly made reference to the said the expansion to northwest Florida was done in partnership with a land developer, The St. Joe Co. Kelly also said the airline would operate eight daily flights with destinations to be disclosed in December.

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Many people don’t understand how a short sale will affect their credit.  The short sale itself does not harm one’s credit in any way.  It is possible to complete a short sale without having a major impact on the person’s credit.   We are going to go through several scenarios to explain short sale options and the ramifications of each scenario.

The largest impact to ones credit is the missed payments.  If someone is 30, 60, 90, or 120 days late on a mortgage, it will significantly impact their credit.  There is a misconception that one has to be  late on the mortgage to be eligible for a short sale.  This is not accurate.  It is possible to negotiate a short sale without missing any payments on the  mortgage.  If someone does this and converts the remaining balance due at closing to a signature loan, their credit should not be impacted in any way. 

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Many Panama City Beach condominium associations are likely to see budgetary shortfalls in the near future. Some already have. In the overall scope of things, Panama City Beach should be in relatively good shape compared to other areas of the state. The most common reasons for our budgetary shortfalls are:

An increase in costs to run and maintain the condominium
Improper budgeting and funding of reserves
The percentage of owners not paying their association fees

It is important to understand that budgetary shortfalls are relatively minor. It is only when the association looses its ability to raise capital from owners (thru increased association fees or assessments) that they get into trouble.

Each building is going to have a different budget to operate from. The price of condominium insurance seems to be every association's favorite explanation for an increase in association fees. Upon closer review one may find condominium insurance has gone up marginally. It should have very little impact on the fee increases. While flood insurance has gone up, each association gets rebates back at the end of the year for their flood insurance policies. When the rebates are deducted from the total premiums paid, the increase is a very small part of the overall increase in fees. If one compares the budget and makes sure that the rebates are properly applied in the budget, the increase in cost may be found elsewhere. *

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