Condo Re-Sales Plummet

Here at www.condosaletrends.com, our only job is to take the data and present the trends so market participants can make informed investment decisions. So, no cheerleading, no anecdotal evidence. The data takes us to where the data takes us. We only track the sale of condo units within the 75 buildings along Thomas Drive and Front Beach Road (20,000 plus units) that are in our database. The analysis covers this particular segment of the market.

The number of real estate sales over a defined period does not by itself tell us if the bottom is near. However, the number of sales is a major factor in how supply and demand affects the market and merits analysis. Be warned, the following analysis is not for the faint of heart.

Our goal in this post is to look at the number of sales in order to gleam knowledge, based on empirical data, as to “what the hell is going on” around here. The “number of sales” or the “percentage of sales compared to listings” is not meaningful without comparing it to something.

The following table illustrates the number of arms-length condo sales from buildings in our database. The Palazzo auction sales are not included because they would skew the trend. What we really want know is how the auctions of unsold developer units may be affecting the larger condo resale market.

The August 2008 sales were down about 30% from the August 2007 sales and were trending downward from the 2008 May, June, and July numbers. The next table shows the number of sales from June 1, 2008 to September 15, 2008 compared to the same time frame in 2007. Because of the short time frame, the sales are broken into ½ month intervals. These are the reported numbers as of 3:30 pm 9/17/2008.

There were only nine reported sales for the first two weeks in September 2008. There were only three reported sales during the second week in September. Granted, there may be one or two additional sales within this time frame that are reported in the coming days. The data indicates that the trend in the number of sales is downward and steeply downward since late August. We will have a better idea of the sales trend in October after all of the September data is in.

The Palazzo auction resulted in 48 sales. As of 9/15/2008, public records indicated that 42 have closed. There are anecdotal reports that Palazzo has additional post auction contracts which have not closed. There are anecdotal reports that Sterling Breeze has 35 contracts based on some auction-type pricing, however none have closed. Ocean Reef with 162 total new units (only eleven units have closed since opening in March 2008) is holding an absolute auction for 31 units on October 18th.

It appears that the process of transferring 1,200 plus unsold developer units to private ownership is adversely affecting the number of sales within the larger resale condo market. In other words, those buyers who are financially able and willing to buy appear to be bypassing the Realtor/Seller relationship typical of most resale transactions and opting instead for the perceived discounts offered by the auctions or directly by the developers.

The data indicates that the number of sales of existing properties will continue to decline to levels we have never seen. Resales just can’t compete in terms of age and price with all of the unsold developer units.
Put on your spurs and hold on tight. This is going to be a wild ride.

Sam, www.condosaletrends.com

Real Estate and the Law of Supply and Demand

A Plea to Colleagues and Sellers

Our single problem boils down to the” hinge” upon which the whole capitalistic economic system turns, namely the law of supply and demand. Currently our market is saturated with inventory, much of it not even close to being competitive with recently proven and tested market values. Even if our inventory is competitively priced at market value, average days on market are still way too high. The solution is simple- either decrease the supply or increase the demand or both.

This web site, as well as a plethora of other venues, is dedicated to informing the public of the many benefits our area offers for families, investors and businesses. I am grateful for this site and the light it has shone upon our area, highlighting the incredible quality of life we currently enjoy and showcasing the bright plans for our future, which are well underway. Thus I will focus this article on the other side of the equation, our “Achilles heel” – an oversupply of inventory.

When tough economic times come in the macro economy, individuals tend to feel like they’re a ship being tossed by the sea, i.e. out of control. However, there is actually something we all can do to help things move forward more quickly. My definition of “moving forward” is to see the average days on market reduced to tolerable levels -let’s say less than 60 days. My definition of moving forward would more importantly include the notion of appreciation over against declining values such as we have seen in the past few years. I know there are a few investors and buyers out there who couldn’t care less at this moment about us “moving forward” but there will come a day when they too will care.

Before I point fingers, I want to dwell for a moment in the mirror. Whoa! Since I am now in reflection mode, I want to candidly admit that I have taken listings that are simply overpriced. Why do I do this? There are many reasons but most of the time I just feel for the folks that must get more than market value, sometimes much more in order not to lose their shirts. I am a sucker for a sad story. Countless times I have heard stories from retirees who just want to be with kids and grandkids in some other area but they need ex amount of $$ to make it happen. Other times my motive may be sinister, to be perfectly honest. I might take an overpriced listing due to the exposure I get from the sign. One only needs to drive down Front Beach Road or Thomas Drive to see more than a few playing that wild card. Some signs have been up for years. Every now and then a wild card pays off. We get the call off the overpriced listing that leads to a sale, nearly always somewhere else. Other times there is personal loyalty I might feel for a friend or a friend’s friend or family. Oftentimes we will take an overpriced listing because we hope to get it adjusted right later (rarely happens), or because the customer may be a repeat customer (those are tough to pass up). Whatever the excuse, in the final analysis, is it honestly a legitimate reason to take a listing? If we are honest in our Comparable Market Analysis and we see that the seller simply refuses to digest the proof when we present it, then we have to have enough nerve to do as Nancy Reagan once said, “Just say, ‘No’”. There is another reason that we all run into from time to time. Sometimes we are asked to list a property that is unique or simply nothing recently has sold like it. In those cases and perhaps in most, we ought to encourage sellers to invest in a fair and objective appraisal. Sadly, at times they do invest in appraisals but they oftentimes are more friendly rather than fair and objective. Unfortunately, every time I have walked away from an overpriced listing, some other brokerage will come in behind me and take it. The solution is not hard to see – the solution is hard to do. It can be done but at a gut level there needs to be the will to do it.

Sellers insisting on saturating the market with a dream price are really preventing the dream from coming to fruition and, coupled with our willingness to list them, we have in a sense created more of a nightmare than a dream. Most buyers today are well informed, internet savvy, and have done their homework. If they have a targeted area they are likely to be quite familiar with the competition and the recent closed sales. The potential buyer for your property will evaluate your property in light of the closed sales, not in light of folk lore or fairy tales. We hear many stories about so and so selling his property for this and that. Problem is there is no proof, no HUD, no record of a sale.

One other fallacy embraced by sellers is the upgrade fallacy. Granted, upgrades will enhance value some but the kind of mileage most folks try to get out of upgrades is utopian. You can spend 50k on a decent pool easily but it may only add 15k worth of value to your home in this current market. It may help it sell faster but you’re very unlikely to get what you put into it or even more than 50% return. I will never forget the $225k worth of extra value one seller wanted for his house due to the extra- reinforced tie downs and galvanized nails and the unique pressure treated wood he used to build his own house with his own bare hands.

Sellers, if you have an honest appraisal or a good CMA, and you want more than the market can give you, and you’re not willing to settle for market value, then please wait for a better day. If you have to improve it, do it, if you have to rent it out, do it, but WAIT, don’t put yet another wish on the market, exacerbating the problem .

If you must sell then you must, but if you must in this market you must still sell at the value the market will give. Buyers don’t care what you paid for a property; they care about what other properties like yours can be bought for. Sellers need to be aware that improvements and updates do add value but not dollar for dollar. What you spend on improvements rarely converts dollar to dollar IN THIS MARKET. It helps to sell a property faster for a bit more money but not a lot more money. There are some inexpensive upgrades which can enhance curb appeal and the interior presentation that do pay off, such as turf improvement, landscaping, painting, flooring. However, this market is stingy at the moment and we need to be honest with ourselves.

Somehow we have got to get this thing from our hearts and heads to our deeds and actions. My hope is that we can all take what we know and be brave enough to put it into action. Let’s start a new trend one listing at a time. Let’s fine tune our inventories and shed dead weight. We are hearing lots about reform in recent days. Let’s do our part!

Scott Seidler GRI
Prudential Shimmering Sands Realty
850-774-5007 or 850-774-5004
Scott AndSonjaRealEstate.com

TDC Needs New Formula for Special Events

Special events at the beach are wonderful for Bay County. The biggest events, Spring Break and Thunder Beach, drive huge amounts of tourists to Panama City Beach.

Smaller events bring in good revenue for the bed tax collectors (and beneficiaries), such as the Ironman and Gulf Coast Triathlons, Emerald Coast Cruizin’ car show, and hopefully, the new Panama City Beach Seafood, Wine, & Music Festival.

There are a few other small events, but we need many more small and large in order for the tourism economy to thrive year-round. It is — and should be — a top priority for the TDC/CVB to enable and promote special events.

But with special events come special interests, and special interests have no place in our government spending decisions.

Therefore, in order for the TDC to be fair to all event planners, promoters, the bed tax collectors (and beneficiaries), and the citizens of Bay County, they must avoid any conflict of special interests.

Here are a few ways to make this happen:

1. Put bed tax dollars into infrastructure that holds special events, such as stages, fairgrounds, parking lots, ball fields and other outdoor venues. Make it a great place for a promoter to put on an event and succeed.

2. Provide additional support for safety and trash-control during events.

3. Maintain infrastructure.

4. Instead of paying to promote events to tourists, promote Panama City Beach to potential event promoters.

5. Provide marketing research staff to survey event attendees. This tells the individual businesses which events bring what tourists, and helps them do their own marketing/advertising/event sponsorships accordingly.

6. Provide Public Relations support and website exposure for all events.

There! Good! No complaints from anyone.

Hopefully bed tax collectors will agree there needs to be a new policy. But whether you do or not, here are some clear examples of what has happened recently to prove why it is unwise for the TDC to put funding into promoters’ pockets.

1. There is a process in place that a promoter must go through to be considered for TDC event funding. As pointed out in recent PCBDaily.com articles, that policy has not been followed. Therefore, it’s unfair to some, very fair to others and no fair to the rest of us.

2. The promoters are sometimes more shifty than thrifty. Some claim they don’t need TDC money, then get it anyway. Some disappear. Some make promises they have no intention of keeping. It’s no fun watching – or participating in – a government body that must make spending decisions on people / events that really do not have to be accountable.

3. Events can fail. The Circus by the Sea proposal was unique in that they approached the TDC for a $100K “loan” that would be paid back upon success. Most everyone on the TDC and in the business community, including myself, was certain the circus would be a success. Unfortunately it was not. That money is gone, unless the Circus by the Sea miraculously figures out how to market its event and fill its tent. We would have been better off buying 100,000 Lotto tickets.

Hey… Lotto Tickets with Bed Tax Dollars! Not a bad idea compared to the way Special Event money has been handed out lately.

Powerboats to Shred Panama City Beach

We asked for cool events, and we’re getting them. Actually, this has been here before, and I (for some reason) was unable to make it. I’ll be there this year, giving you as much coverage as possible. This is one of the things that makes our area SWEET! Who doesn’t like ridiculous power mated with lightweight boats that sometimes fly out of the water traveling 200 mph? Press release below:

PANAMA CITY BEACH, Fla. (September 16, 2008) – The tranquil waters of the Gulf of Mexico make way for high-speed adventure for the nation’s largest powerboat race. Catch the 2008 Super Boat National and Florida Championship Race, Fri., Oct. 3 – Sun., Oct. 5, in Panama City Beach, Fla. You’ll see the biggest, fastest powerboats and top drivers in the U.S. race to claim the National Championship title.

This premier super boat event draws the 23 leading teams across the country for a six-mile race through emerald-green seas at speeds of up to 200 miles per hour. With boat parades, awards, parties and more, it’s an action-packed weekend for the entire family.

The Super Boat National and Florida Championship Race is the culmination of the Super Boat Grand Prix national series. Winning teams will compete for the international title in the Super Boat World Championships, Nov. 2 – 9, 2008, in Key West, Fla.

The Super Boat Grand Prix is sanctioned by Super Boat International Productions, Inc., as the leading series in the extreme sport of professional powerboat racing. Now in its 18th year, the Grand Prix attracts top-ranking competitors and enthusiasts across the country for 10 events along America’s East Coast, from Miami Beach to the Hudson River.

In Panama City Beach, the National and Florida Championship Race promises to get the heart pumping during three days of high-speed fun (see schedule below for days, times and locations). Land lovers will enjoy plenty of onshore action. Take an up-close look at some of the world’s fastest and largest powerboats, and meet their owners and racing teams in the Dry Pit Area of the Race Village, located in Pier Park on Front Beach Road in the center of town. The Mayor’s Welcome Party kicks off the event festivities, Fri. 7:00 p.m. On Sunday, all competition boats will begin the entry into the water starting at 11:00 a.m. from the marina at Marina Landing Condominiums on the northwest side of St. Andrews Bay and cruises out to the Gulf of Mexico.

On Sunday, spectators line the pristine shoreline of Panama City Beach for prime viewing of the main racing events, starting at 12:00 noon. Competitors will maneuver the six-mile rectangular Official Offshore Race Course between the Dan Russell City Pier and the M.B. Miller County Pier. During the event, the 50-foot Super Boats slice across the emerald-green waters of the Gulf of Mexico, propelled by up to four engines that allow them to reach speeds upwards of 200 miles per hour in less than a minute. The winners of each race will go on to compete for the international title in the world’s largest powerboat race, the 2007 World Championship Race.

The 2008 Super Boat National and Florida Championship Race event is presented by the Bay Area Sports Association, Inc. (BASA). A collaboration of local community and corporate partnerships, the not-for-profit organization was established to encourage, support and promote recreational, amateur, Olympic and professional sports activities within the Greater Panama City area. BASA also supports charitable initiatives through local events to raise funds for youth sports in Bay County. In line with this mission, participating Panama City Beach restaurants will donate ten percent of all food and beverage sales on Sunday’s Race Day to the association.

A full schedule of Super Boat National and Florida Championship Race activities can be found online at http://www.superboat.com and as listed below:

Panama City Beach Event Schedule
Friday, October 3, 2008
• 9:00am – 5:00pm – Registration/Information at Race Village, Pier Park East
• 7:00pm – Mayor’s Welcome Party at Sharky’s Seafood Restaurant, Front Beach Road

Saturday, October 4, 2008
• 9:00am – Mandatory Drivers’ Meeting at Pier Park East
• 10:00am – 5:00pm – Registration/Information at Race Village, Pier Park East
• 9:00am – 5:00pm – Dry Pits at Pier Park East
• 10:00am – 5:00pm – Testing & Launching, location TBA
• 10:00am – 5:00pm – Practice runs on official offshore course, Front Beach Road between County Pier and City Pier
• 7:00pm – 9:00pm – Racers’ Party at Jimmy Buffett’s Margaritaville restaurant, Pier Park

Sunday, October 5, 2008
• 7:30am – 8:30am – Physicals: Pier Park East
• 8:00am – 5:00pm – Launching/ Recovery, location TBA
• 9:00am – Mandatory Drivers’ Meeting at Pier Park East
• 10:00am – Pilots Briefing at Panama City – Bay County International Airport
• 11:00am – Wet Pits. All boats will enter the water at Marina Landing Condominiums on Northwest side of Hathaway Bridge/U.S. Hwy 98, St. Andrews Bay.
• 12:00pm – Start of Race, start and finish line at Sharky’s Seafood Restaurant, Front Beach Road
• 5:00pm – Awards Ceremony at Sharky’s Seafood Restaurant, Front Beach Road

Laketown Wharf Busts, Leaves Developer Crying

We’ve all heard the rumors about what is happening with Laketown Wharf. Jerry Wallace, the developer, once positively referred to the area around Laketown Wharf as a “condo canyon” and himself as the Trump with a drawl. I bet he doesn’t feel so Trumpish now.

I was VERY critical of this development from the get-go, extremely worried what this “behemoth” would do to the image of our area. A largely vacant, 750 condo, elephantine monolith, Laketown Wharf actually had great aspirations, with some possibility of success had it come unto creation mid 2004. With huge swimming pools, a Balagio-style fountain/light show, a 650-seat live performance theatre, 5 restaurants and 1,000’s of square feet of retail space, it was planned to be almost a small town. And, it is actually kind of awesome, even though it is not on the beach.

On the 12th of September, Jerry Wallace, developer of Laketown Wharf and President of Laketown Wharf, Inc. signed over the remaining unclosed units to Corus Bank, the institution that originally financed the construction of the project. With only 8% of the 750+ condos built actually closed, the only option was to hand the rest back to the bank.

At this point, a new chapter is created in the life of Laketown Wharf. The sad part is that the image of a huge traffic crossing point on the beach is now completely up to a financial institution that may or may not have our best interests in mind.

As of two weeks ago, it had looked like the grounds were being neglected, but after going by today, I noticed that some of the pools had been filled back up. The water-features were not on, nor were any of the fountains and the whole place looked like a ghost town.

We’ll be following this closely.

Doc 1

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PCBDaily Twitter Weekly Updates for 09-16-2008

I’m preparing for my appearance on Lee Sullivan’s News View show tonight. See me on TV! Channel 28 WPGX #
I’m sitting outside thinking about how remarkably pleasant it is outside right now. #
Beware of price gouging at gas stations. 3.95 a gallon at some 3.65 at others. #
Hrcn ike has sent storm surge under beach houses and is currently eroding our beach. Check pcbdaily.com in an hour for video #
Stuck in the rain on my motorcycle at pier park. Trying to get to an airport meeting. Shoot! #
The skies are beautiful and clear, but man is it hot! #

Grand Lagoon National Cancelled for this year

Well, I hope this is not a sign for times to come for Bill Spann and his new fishing tournament, the Grand Lagoon National. The first year out of the hole the competition was postponed, postponed again, and now totally cancelled all together.

Regardless of what some told me, I truly thought it was to be a good addition to this years Panama City Beach festivities. With Spann’s experience, and after a couple of conversations with him, it was very apparent that this was not his first rodeo. He has been doing this very type of event for years, and has always put on a good show.

This year, so far, has certainly not been without peril, with regards to the weather. With 6 tropical storms and/or hurricanes to have come into our Gulf waters this hurricane season, planning anything for our area is challenging at best. Jack Bishop remarked at the last TDC meeting that it is always risky planning event during this time of year. The last couple years have been very calm, but this year has been very active. We can only speculate what is to come next year.

So at this point, what comes of the $50,000 the TDC gave The Grand Lagoon National to help it “get off the ground”? That money was to be an “investment” that had some promise of return with a potential of profit. I’m sure that money has been spent as some festivities did take place, but no revenue was generated through registration fees. Does the TDC stand to recover that money next year? Will the Grand Lagoon National receive $50,000 next year as allocated in the FY2008-2009 budget?

Quiet Tropics

Gary Gnu

To quote Gary Gnu from the Muppets, “No gnus, is good gnus”. I am happy to report there there are no tropical cyclones active in the Atlantic Basin at this time. It’s about time.

People all across Texas, Louisiana, and the midwest are still trying to clean up from Ike. Thousands of people from the Houston are still in shelters. Others are still waiting for food, water, and electricity. Galveston is trying to clean up and assess the damage. It will be some time. Officials think it will be months before the city reopens as the main gas and electric lines to the island were severely damaged. They are also warning of mosquito borne illnesses. “Galveston can no longer safely accommodate its population,” City Manager Steve LeBlanc said. “Quite frankly, we are reaching a health crisis for people who remain on the island.”

Ike’s effects have been far reaching. In the midwest, there has been major flash flooding. Where we grew up in Northwest Indiana is suffering badly. They had received a lot of rain and then when Ike’s reminants came through it was just too much. Several hospitals, schools, and churches are under water. Bryan’s parents churc has about 6 feet of water. The high schools fooIt’s sad because those people don’t have flood insurance as this is extremely abnormal for that area.

For us locally, things are pretty good. The waters have receded and the beach seems ok. According to the paper this morning, there is still a threat of rip currents. It looks as if there is still a red flag flying this morning.

See Me on TV!

Former Panama City Beach Mayor Lee Sullivan has been gracious enough to invite me on his weekly News View Show aired on WPGX every weekday evening at 9 pm.

Last Tuesday he had the current Panama City Beach Mayor, Gayle Oberst, on the show discussing beach tourism, the local economy, the TDC efforts, and the bed tax, just to name a few.

Today, when I’m on, we’ll be discussing all the fun stuff we cover on pcbdaily.com.

Be sure to join us for 30 minutes of fun and “attitude”!

Again, it airs at 9 pm on WPGX. I have Dish Network so the channel for me is 28. I hope you get a chance to see it, and hopefully I won’t look like a fool!

Pier Park Gearing up for Winter

Talking with Felecia Cook, Pier Park’s marketing director, a few weeks ago, I had inquired as to what they were doing to keep ‘the park’ active during the off-season. “We have tons of stuff planned, we will be very active all winter.”

Below is the schedule of events so far planned.

2008- 2009 COMMUNITY EVENT PLAN:

September

Sept. 20th- Tiles in the Park- Over 300 tiles will be installed in the C building area from local children who painted them with the Visual Arts Center and the Boys and Girls Club
Sept. 20th – Fire Flies and Kites in the Park- an art activity creating Fire Flies and kites for children with the Visual Arts Center
Sept. 24th through 28th- Thunder Beach- Pier Park to host bike show on property
All Month- Comcast Presents On-stage at Pier Park- Local singing, acting, instrumentals, dancing groups to perform at Pier Park

October

All Month- Oktoberfest at Pier Park – A fall celebration for families, hosted by Hofbrau Beer Garden
Oct. 3rd- Breast Cancer Awareness Ribbon Hanging- Ribbon Celebration in combination with Vera Bradley and Irene & Co. we will be hanging large pink bows on the palm trees in the promo area and Irene & Co. will add ribbons purchased by those donating to the fund.
Breast Cancer Awareness to be celebrated all month
Oct. 3rd, 4th & 5th- Super Boat National Championship Boat Show- Power boats parked for display on our property
Oct. 4th- Bay Medical Sweeny Todd Blood Drive- Mobile blood center set up for donations in front of Blender Clothing/ Radio remote from Wave 100
Oct. 4th- Jelly Bean Mobile- Candymaker to host the Jelly Bean Mobile on property for kids
Oct. 10th, 11th, & 12th- Seafood, Wine and Jazz Festival at Frank Brown Park- A highlight of the fall season, showcasing arts, crafts, local restaurants, and regionally and nationally renowned musicians performing on two stages during three days, 28th Annual.
Oct. 11th – Emerald Coast Triathlon- Pier Park property will be involved.
Oct. 17th- Heart Walk- Charity walk through Pier Park for the American Heart Association
Oct. 18th- Girls Inc. Half Marathon- Charity marathon beginning and ending at Pier Park
Oct. 25th – Kids Festival- Stories, crafts and games for children
Oct. 31st- Malloween – Pier Park fall activities such as, costume competitions, crafts, and more.

November

Nov. 1st- Ironman Florida Triathlon- Pier Park Property will be involved
Nov. 3rd through 8th- Emerald Coast Cruzin – Classic Cars and the 35th Anniversary of American Graffiti. America Graffiti cast members, parade of cars, car competitions, “50’s Dress Up night, and more. Parade to be held through Pier Park on Wednesday Nov. 5th
Nov. 7th- Taste of the Beach – A multi-regional initiative spear-headed by Coastal Vision 3000 to promote this region and brand it as “The Beach”. Pier Park will represent Bay County by hosting one of the four “Taste of the Beach” events planned to promote this new initiative.
Nov. 14th, 15th & 16th- Madonnari – Italian street painting festival hosted by the Visual Arts Center
Nov. 28- Black Friday– Stores open at 5am for the busiest shopping day of the year
All Month- Food Drive- this will be done to benefit a local food bank

December (Dates to be determined)

Holiday Concert Series – All public and private schools, child centers, and churches will be invited to come to Pier Park to sing/ play their holiday cheer.
Tree Lighting Ceremony- Pier Park will become the “downtown” of PCB and all holiday activities.
Christmas at the Beach Parade- Pier Park Drive will be the focal point of the Holiday Season.
Santa at the Beach Photos- Family tradition restored to the beach by inviting Santa and his reindeer to join us at Pier Park.
Santa at the Beach Pet Photos- Family tradition restored to the beach by inviting Santa and his reindeer to join us at Pier Park and introduce him to your special family members.
Toy Drive- this will be done to benefit a local charity group for bay county.
New Year’s Eve Beach Bash- This will be the first of an annual tradition here at Pier Park.