Expectations were high, and so was the attendance. After the wildly successful Palazzo auction, many came interested in seeing “where the market was”, and many more came to have an opportunity at getting a good deal. At the end, many agreed that the market was at the bottom and that prices wouldn’t come down much more, if any, from this number. On the other hand, many more still agreed that the market still has some room for correction.
There was an estimated 400 in attendance with 126 registered bidders from 17 states and 2 countries. When asked at the beginning who was from Panama City Beach, few raised their hands indicating this type of selling forum definitely attracts out-of-towners.
“I was wanting to move back to the states in 2006, but the prices were way too high, this may be my chance to come back, ” said Jerry from the Dominican Republic before the auction hoping to get a good deal.
“I’m hoping to get in at around $140,000 to $150,000 on a two bedroom,” said one local agent, who was also a registered bidder, “I won’t go much higher than $150,000.”
Before the auction began, the energy was great. There were people everywhere with not one empty seat and many people standing anywhere they could find an unoccupied piece of concrete. Bidder packets were being shuffled, pads were being prepared for note taking, and calculators were at the ready.
“You have to factor in the 10% buyers premium in all price per square foot calculations,” said one bidder, “the final auction price, is not the final sold price.”
The auction started with the 4 bedroom configuration on the block at an ambitious $500,000 that was quickly corrected to $300,000. The first bid came in at $310,000. The first 4 bedroom condo sold for $340,000, $374,000 after the buyer’s premium, or $233.75 per square foot.
“That number has got to come down, there’s no way all of them will sell at that price,” said the guy sitting next to me.
The very next condo was started at $310,000. After no bids, a member in the audience yelled “$305,000.” Two minutes later, the feeding frenzy started. $305,000 was the magic number, with 8 four-bedroom 1,600 square foot condos selling at that price. After the 10% buyer’s premium, the final price was $335,500, or $209.69 per square foot.
The two bedroom, 1,146 square foot condos were next. Talking around, this was the most desirable size. The majority of the buyers were price-point buyers, wanting to get in for as little as possible.
The two bedroom auction started at $300,000, was brought down to $225,000, then $210,000, then $205,000 – SOLD! The magic number for the two bedroom configuration was $205,000, $225,500 after the buyer’s premium or $196.77 per square foot. 16 two bedroom condos were sold for $205,000.
Including the pre-sold condos, all-in-all, 35 condos were sold generating an estimated $8.839 million. Initially, the developer offered 31 condos for sale.
After the price was set at $205,000 for the two bedroom, the auctioneers said the developer wouldn’t sell for less than that. At this announcement, approximately half the audience rose from their seat to exit. The line for those wanting their deposit checks back crossed the entire length of the pavement. Many were disappointed that not all of the condos were sold like a true auction, many didn’t want to pay more than their targeted $140k-$150k price range, and still others understood, but were still looking for a sweeter deal.
The real question here is whether we are at bottom. The sold price at Ocean Reef was less than Palazzo, but many agreed that Palazzo was nicer and justified the higher price.
One thing is for sure, if you are a developer and you want to dump some condos, auction seems to be a good choice. “Panama City has turned out to be an incredible market for condos. This clearly demonstrates the pent-up demand and shows that there’s no reason for condo developers to sit on unsold inventory when they can be sold efficiently and quickly by auction,” said William Bone, President of National Auction Group.