For example, your table says there are 880 units at Emerald Beach Resort when in fact there are only 541. Another example, in your blog of October 2008 you wrote “The Ocean Reef auction on October 18, 2008 concluded with a reported 35 sales. Sounds good but they still have over 140 unsold units in their inventory.” There are only 161 units in Ocean Reef and several units had closed prior to October 2008. This comment was detrimental to sales at a time when there was clear sales momentum.

To set the record straight, I would like to specifically respond to the three major issues:
1. Supply of developer owned units
2. Condominium financing
3. Short sales and foreclosures

1. Supply of developer owned units – Since I work mostly in West Panama City Beach, I’ll share my West Side, Gulf-front, Story. This includes the following Gulf-front condos built after 2003: Aqua, Calypso, Celadon, Emerald Beach Resort, Emerald Isle, Ocean Reef, Palazzo, Splash, Sterling Breeze, Sunrise, Tidewater, and Tropic Winds. The total number of units in the above mentioned condominiums comes to about 3,225.

Let’s review the number of developer unit’s that are unsold. First we’ll eliminate the condos that have no developer units for sale. This list includes Calypso, Celadon, Emerald Beach Resort, Emerald Isle, Splash, Sterling Breeze, and Sunrise. This leaves us with Aqua, Ocean Reef, Palazzo, Tidewater, and Tropic Winds. The total number of unsold developer units from this group is approximately 336 or 10.4%. Tidewater and Tropic Winds make up 235 of the unsold developer units.

The total number of sales since October of last year for Ocean Reef, Tropic Winds, and Tidewater is approximately 185. This is an amazing number of sales considering our depressed economy! It is likely the remaining developer units in Aqua and Palazzo will be sold within the next several months as “developer specials” are now in place.

If nothing changes, meaning we are still in a recession, financing is difficult, Pier Park is slow, and the new airport doesn’t help, it may take another year and a half to sell the remaining inventory. However, if any good news materializes the remaining developer units will be sold quickly and procrastinating buyers that are sitting on the fence will be shutout.

Since I work at Ocean Reef, on a daily basis, I would like to present some pertinent facts as they relate to our development. Since October 2008 there have been 82 developer sales. Ocean Reef is one of Panama City Beach’s newest developments and benefits in having a majority of new owners that purchased after the market decline. Therefore, there are no short sales, no foreclosures, and no resales. All of our owners are paying their HOA dues and the association is in great financial shape.

Many have inquired about the success at Ocean Reef and why vacation home buyers and investors are flocking to our development. The First and foremost reasons are the price, opportunity, and development stability that Ocean Reef has to offer. The “Ocean Reef Deal” is often thought to be “too good to be true” but, it’s not! It’s the “Real Deal”! Our prospects are astonished to learn that you can now purchase a brand new, gulf-front, 2 bedroom, 2 bath, beach condo (located in a stable development) in the mid $200,000’s. In addition, the home owner association fees have held steady, for the past 18 months, at an affordable $284 per month! Ocean Reef is a stable development with strong sales and without the risks associated with foreclosures, short-sales, and bankruptcies. Most important, Ocean Reef is one of Panama City Beach’s newest developments and benefits in having new buyers, paying mostly cash, which purchased in 2008 or 2009.

2. Condominium Financing – I agree in general that financing a condo is difficult for the average buyer. However, with over 326 sales since October 2008, just counting our west end condo data base, it shows that qualified buyer’s are realizing that now is the time to purchase! Buyer’s that choose to wait until prices decrease more are also gambling that interest rates will hold steady or drop. For example a 30 year fixed loan of $250,000 at 5% carries a monthly payment of $1,352. A loan of $250,000 at 6% carries a monthly mortgage of $1,499. During the course of a 30 year term the additional cost for interest would be $56,455. If you believe that prices are going to fall by $56,000 or more, then wait. However, the reason interest rates are at a historical low is because the government has pumped approximately one trillion dollars into the bond market keeping interest rates low during the recession. This is about to change as the economy stabilizes.

3. Short Sales and foreclosures – Mr. Portman, you indicated that 43% of all sales in your data base during the first 6 months of 2009 were related to foreclosures and short sales. By combining gulf-front properties with properties not on the beach you have misled your readers into thinking they can easily purchase any property including gulf- front. This is totally not the case and should be corrected. The fact is, in my data base of 3,225 west end condos, the total short sales and foreclosure sales, for the first 6 months of 2009, are as follows:

Aqua = 0, Calypso = 0, Celadon = 8, Emerald Beach Resort = 9, Emerald Isle = 2, Ocean Reef = 0, Palazzo = 0, Splash = 5, Sterling Breeze = 0, Sunrise = 3, Tidewater = 0, and Tropic Winds = 0

In summary, 27 sales out of 326 were related to short sales and foreclosures from 10/01/08 to 10/01/09. This is about 8%. These numbers indicate that in most cases developer sales or resales are priced better than the short sale and foreclosure market and certainly are less risky.

In summary, Panama City Beach, the “Next American Boom Town”, boasts beautiful sandy pristine white beaches, perfect emerald waters, romantic sunsets, and attracts millions of visitors each year. Today, luxurious new condominiums, an upcoming international airport, new shopping centers, and new entertainment venues are attracting real estate investors, condominium owners, and beach lovers from all across the U.S.

Condominium ownership, along Florida’s Emerald Coast, has never been better and now includes the new amenities our area has to offer. Panama City Beach is undergoing a complete transformation, including new multi-million dollar developments, that provide priceless family fun, exquisite lifestyles, and of course our #1 investment opportunities for both Ocean Reef and Tropic Winds.

Don’t put the blame on the messenger[s]. Under the same scenario you mentioned, if there are competing units on the market at an asking price of $385,000 there is no way the unit is worth $500K, or even $385,000. Sales are not the only criteria that appraisers are required to analyze. What INFORMED buyer/investor would pay $500k [or any amount] when a suitable alternative is READILY available for less? Supply, demand and economic conditions…Foreclosures and short sales are the largest part of the market at this time. Just read the many marquees and advertisements around town, and look at the market stats. Most lenders I have dealt with on short sales order appraisals to check reasonableness of offers.

The problems outlined in the article are found in spades at our condo. 58 of 168 condos are still unsold, 2 units gone in bankruptcy (same owner), another 7 in various stages of foreclosure with probably another 3, at least, going soon.

Last list I saw of owners debts to the condo assn. had 42 owners out of 110 on it, a good dozen+ were in signifigant amounts.

I have frequently raised the question and will do so yet again, has anyone EVER been told by a realtor that it wasn’t a ‘good time to buy’?

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Here is a seperate issue to put forth for realty professionals who read here. The various foreclosed condos that go ‘on the courthouse steps’ seem to be bid on and purchased by those banks who own the dud mortgages. This seems to ace out any private sales to individuals looking for a condo at a greatly reduced price.

A clerk at the Bay County Foreclosure section said this is usual and the banks or mortgage firms will try to buy them for $100 but if there are other bidders they usually take the bids right up to the amount owed. This has happened to the last 3 condos at our development. I was thinking of bidding on one over my own condo which is soon to go but it seems that it would be a waste of time. Comments please!

Sam

Exactly what I thought. I was impressed by the last line: “It is not unreasonable to assume that sale prices will decline another 10% or more over the next 12 months and that may not be the bottom.” So why buy now? Anyway, I put a link to the blog article on my own condo blog as it is an interesting thread.

The problems outlined in the article are found in spades at our condo. 58 of 168 condos are still unsold, 2 units gone in bankruptcy (same owner), another 7 in various stages of foreclosure with probably another 3, at least, going soon.

Last list I saw of owners debts to the condo assn. had 42 owners out of 110 on it, a good dozen+ were in signifigant amounts.

I have frequently raised the question and will do so yet again, has anyone EVER been told by a realtor that it wasn’t a ‘good time to buy’?

——————————–

Here is a seperate issue to put forth for realty professionals who read here. The various foreclosed condos that go ‘on the courthouse steps’ seem to be bid on and purchased by those banks who own the dud mortgages. This seems to ace out any private sales to individuals looking for a condo at a greatly reduced price.

A clerk at the Bay County Foreclosure section said this is usual and the banks or mortgage firms will try to buy them for $100 but if there are other bidders they usually take the bids right up to the amount owed. This has happened to the last 3 condos at our development. I was thinking of bidding on one over my own condo which is soon to go but it seems that it would be a waste of time. Comments please!