Suffering through a shadowy frigid 50 degree temperature, bidders and spectators alike gathered in anticipation in the hottest condominium auction to hit Panama City Beach. The party was held under the covered portacache at Origin in the Towne of Seahaven just 1/2 mile east of Pier Park on Panama City Beach.
Even as late as 12:40 pm, the crowd looked sparse, of course, maybe it appeared to be spread thin as the area was large and people were scattered all over. A childhood technique comes to mind to give the appearance of a eaten dinner – spread the food around a little to make a lot look like a little, and break for an early desert.
Bidder registrations were at a scant 30 something when I arrived on the scene at 12 noon, although I was unable to get a definitive number. I was able to confirm after the auction had begun that a total 54 had registered to bid.
“I’m looking to buy 40 cents on the dollar,” said one registered bidder, indicating the smell of blood in the air. “I’ll probably offer $200,000 for a 2 bedroom,” said another bidder, “not sure if I’ll get it, but I’ll try.” He later signed the paperwork for a 3 bedroom for his original budget of $200k. At the end of the day, his purchase was the least per square foot purchase of all the condos offered for sale at the auction. He bought a 1963 square foot condo for $112.07 per square foot, after the buyer’s premium. “It’s always a little risky bidding first,” he said, “but nobody was bidding, so I just through out a number and I actually got it.”
It took a while for the crowd to wake up, but once they did, a feeding frenzy much like what was seen at Palazzo ensued. The market price seemed to be set by a few winning bidders, then the National Auction Group began working with interested parties to negotiate and sell a total of 37 condos.
What I found interesting was that at some point, the actual auction stopped but real estate continued to sell. The National Auction agents seemed to change modes from auctioneers to negotiators bringing offers and deals back and forth between attendees and the developer. In fact, only 9 condos actually sold auction style – all the others happened after the fact.
As the cold wore on and the crowd again grew scarce, condo sales were still being picked off one by one. The average price per square foot sold after the buyer’s premium was $166 with a range from $112/sf to $196/sf.
I should note that if you were following the live updates that I was posting as the auction was happening, all the sold prices stated were BEFORE the 10% buyers premium. The action was just happening too fast for me to take notes, send in updates AND do another calculation.
Out of the condos that were sold when I left only 3 were pool/center view, indicating that with the lower than expected prices, the developer is reserving the ‘premium’ units for a higher price.
Talking with Neel and Mike Bennett several times throughout the auction, they both expressed their concern for the market and the desire of a higher price being commanded from their product offering. Many owners are upset because of the auction as it certainly makes clear the value of these beautiful condominiums at Origin in the Towne of Seahaven.
Being an owner, it certainly hurts to know how upside down we are right now, but at least we know – and “knowing is half the battle,” as a wise G.I. Joe commercial once said.
I’ve been criticized in the past for sticking up for the developer, but in this case I stick up for them not because they are friends, but from a business stand point. The reality is that even though we are significantly upside down, our hurt doesn’t hold a candle to that of the developer. We’d all like the market to be a lot better than what it is now. Everyday we have to fight for an appetite because of all the money we’ve lost. The fact is that there is nothing we can do about it, we are were we are. For the developer, the best thing to do is get rid of as much inventory as he can – that is the only way he can move forward. If he doesn’t do it, the bank will, he can’t hold onto unsold condos forever.
This auction is another testement to what I’ve been telling everyone for months – Now is the time to be buying real estate. Prices are better now then they’ve been in several years.
Below is the unit number/price breakdown for all the condos sold when I left Saturday. I’m hoping to have some final numbers soon, and will post them when I do.
It is my understanding that the Bennetts (developer) are still taking deals. If you need more information on this, or help purchasing a condo, feel free to contact me at jason@pcbdaily.com or 850-319-1172.
Sold condos – all numbers are after 10% buyer’s premium with the bold units being the ones that are on the inside of the horseshoe.
| Unit # | Type | SF | Price | Price/SF |
| 1033/1035 | 3 Bedroom Lock B | 1781 | $297,000 | $166.76 |
| 1133/1135 | 3 Bedroom Lock B | 1781 | $297,000 | $166.76 |
| 1433/1435 | 3 Bedroom Lock B | 1781 | $297,000 | $166.76 |
| 1701 | 3 Bedroom D | 1963 | $220,000 | $112.07 |
| 429 | 2 Bedroom B | 1427 | $221,100 | $154.94 |
| 1432 | 2 Bedroom E | 1293 | $210,000 | $178.65 |
| 501/503 | 2 Bedroom Lock A | 1306 | $220,000 | $168.45 |
| 535/537 | 2 Bedroom Lock A | 1306 | $220,000 | $168.45 |
| 1425/1427 | 2 Bedroom Lock C | 1303 | $176,000 | $135.07 |
| 1232 | 1 Bedroom A | 815 | $137,500 | $168.71 |
| 1031 | 1 Bedroom B | 881 | $143,000 | $162.32 |
| 1331 | 1 Bedroom B | 881 | $143,000 | $162.32 |
| 1407 | 1 Bedroom B | 881 | $137,500 | $156.07 |
| 729 | Studio B | 541 | $93,500 | $172.83 |
| 809 | Studio B | 541 | $93,500 | $172.83 |
| 733 | Studio A | 475 | $93,500 | $196.84 |
| 805 | Studio A | 475 | $93,500 | $196.84 |
| 933 | Studio A | 475 | $93,500 | $196.84 |
| 1234 | Studio A | 475 | $93,500 | $196.84 |
| 423 | Studio C | 465 | $60,500 | $130.11 |
| 525 | Studio C | 465 | $75,900 | $163.23 |
| 1023 | Studio C | 465 | $75,900 | $163.23 |
| 1125 | Studio C | 465 | $75,900 | $163.23 |
| 719 | Studio D | 562 | $75,900 | $163.23 |
| 819 | Studio D | 562 | $75,900 | $163.23 |
PCBDaily 
It is one of the better looking buildings, but I couldn’t justify buying in that building at any price with the unusually large HOA fees that are essentially the same size as your mortgage payment would be. Over $1k/mth for a three bedroom and $600/mth for a studio. Plus what exactly are owners getting for the towne HOA fees? How much does it cost to rake dirt?
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Can you provide a list of available units?
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Ryan, you are a little off on the HOA fees. The highest estimated HOA fee for a studio in 2009 is $271.42, including the Town fees.
Rob, I’m working on getting a list right now.
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Thanks Jason, for doing an outstanding job of covering and reporting the results of this event. The information will be very useful for me, as I could not attend the auction.
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Jason,
Excellent reporting! I appreciate your efforts in showing the results of the auction along with the actions of the developers. I have been a long time friend of the Bennett family and admire their efforts with the development of Seahaven. Keep up the good work.
Troy Campbell
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couldn’t read the rest after I read “just THROUGH out a number”
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Jason,
Thank you for the excellent job of covering the event.
I am the person that purchased the 3 brm for $220,000. We feel that the property represents an attractive investment at the prices paid at the auction.
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Kudos Jason!
Mark,Especially the price YOU paid-you pretty much stole that unit
Congrats!
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Jason, yes, you have a done a good job covering and reporting this tragedy. As an owner, this sickens me, I believe that you are an owner too. The owners have been treated poorly and with disrepsect since the very beginning of closings. The rental program was renegged, the building upkeep has been very disappointing…on and on, many examples as you would know. There have been far more promises broken to the owners than delivered.
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Before everyone gets too euphoric about their “deals” in Seahaven and other distressed condo projects, you may want to consider the overall effect of distressed sales as they relate to the entire project. Condos represent a portion of a total project that needs condo fees to keep the project maintained and viable. If there are individual owners that default on their monthly dues, or there just aren’t enough owners contributing, all of the sudden the developer does not have the funds to maintain the project and your $116/ft. deal becomes a nightmare. The common area maintanence is neglected and the project that once was glimmering and new has taken on the look of neglect that frightens future buyers from purchasing units. It becomes an out of control, downward spiral. I own a lot in a community where this is taking place and the overall appearance of the neighborhood has deteriorated appreciably from its former pristine condition. As a result, real estate values in the project are declining, not to mention the overall negative image that comes with neglect. Potential buyers are staying away and thus no new dues are being paid. At some point the developer will have no choice but to increase dues on the residents that are able to pay. I wouldn’t be getting out the celebratory cigars just yet.
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Great Job Jason. You seem to be plugged in. What are the Bennett’s plans for the rest of SeaHaven? Do they still plan to develop the rest of their land or do you think they will pull out after Origin due to market conditions?
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I was off on the studio, but the big 3bd is almost $1k/mth or around $.50/sq.ft. which is pretty high in my opinion.
Click to access seahaven_final_units_3.pdf
I think the HOA is the scariest part of owning any condo, because you have no control and they always seem to go up.
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very good job jason, thanks
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This is interesting. I’m probably not the normal reader on this site as I live in Vancouver, B.C., which is close to across the world from PCB, however, I bought a place in Boardwalk last year, and it’s become a hobby of mine to review this site regularly. I’m also a financial planner by profession, so I believe I have a good grasp of numbers. Interwest is especially interesting as they manage a couple of ski hills called Whistler, which along with Vancouver, is host to the 2010 Olympics.
As I view things it appears that property off the water was a bit pre-mature in coming to the market but obviously this is a hindsite observation. But if I were thinking of buying an additional unit, someone where in PBC and the thought has crossed my mind, I’d be focusing on ensuring the property was in a rental program with a reasonable track record. Hence my decision to buy at Boardwalk. But something like Seahaven could potentially work if the units were on their timesharing program, as that would likely increase the potential revenue base, which I think is necessary until the market corrects, which could be in 2010 or possibly later. So basically if one is an investor, they have to look at both the price, which at Seahaven is excellent, and the revenue generating potential, which I admit I’m unsure of. If there are no revenues and you aren’t living in the unit, you’re just dumping $$ into HOA fees etc. For all intensive purposes you might as well add that the to purchase price, if that is the case.
Anyway, that’s my point of view from a distant observer, who has decided to spend this Christmas at PCB.
Happy Holidays
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Terry,
Please email me at LT360@msn.com. I’d like to talk to you further about your post here.
Thanks!
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The plans for the rest of the Towne of Seahaven include a 10 to 12 year projected build out. The time has been extended because no one knows when the market it going to improve.
The next step will be phase II, Duval Street. I was out there on Friday and was told that the bids for construction came in way too high first part of 2008 for it to be feasible to build then sell, or the other way around. They are planning to try and bid it out again first quarter 09 to see if they can get back into a reasonable field of play.
The developer, as well as everyone else is, unfortunately, at the mercy of the market.
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I stayed at origin this summer and I found it to be pretty nice. I have considered buying a unit with the price plummet but the only thing that turns me off is that I recommended this place to my buddy to stay for his honeymoon. He was under 25 so he was having trouble finding a place that would rent to him. Well, after calling down there he got into a verbal confrontation with a girl that works at the front desk that ended up telling him “your not fu@king staying here” and then she hung up on him. So to all you owners that are reading this site you might want to think about the kind of rental service your units are getting if you rely on the money to help make your monthly payments. Needless to say I cant buy there since I know how the “resort” is ran.
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Chad, I’m sorry your friend had a terrible experience with the rental management group at Seahaven. Nobody in any form of customer service, especially related to hospitality in our area shoud EVER talk to anyone like that.
I also apologize that your friend was unable to rent because of his young age, but I am glad that they did not bend the rules for him. Although I’m sure that he would have been an outstanding guest, many are deceitful as to their true intentions just to “get in”, then destroy the place beyond what their deposit will cover. Those rules are there for a reason.
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Seems silly to me that Origin welcomes the under 25 crowd with open arms during college spring break while prohibiting an under 25 MARRIED couple from staying during other times of the year. I would think that the college spring breakers would be more likely to cause damages.
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I have to agree with you Bryan, with additional comments however. As an owner, I visited Origin after Spring Break and also during Labor Day. The amount of damage during Spring Break was minor compared to the “Summer Crowd” that was allowed to stay there. They seem to be renting at any price all summer long, I guess to inflate rental percentage or something. Graffiti on the elevators, damage to the units, stolen items from the units, cigarette burns all around the pool…etc., and I did not see any of this kind of damage in May after Spring Break, this occured during the summer.
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Brian,
Thanks for the insight as to the results of the bargain rental rates that have been offered at Origin. Although most of the tourism powers here seem to disagree, I believe that a successful tourist destination has to do more than just concentrate on putting “heads in beds”. Who the heads belong to can make a difference in the overall experience
for other visitors and potential investors.
In order for our condo market to recover, I believe the complexes will need to be more than transient hotels. They also need both full-time residents and 2nd home owners that do not rent out their units to absorb some of the excess inventory. And I doubt these type of owners are interested in condos that put up with this type of guest behavior.
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Was interested in one of these condos at auction but still uneasy about the general market. According to Bay Co Clerk’s website, only 19 of the reported 37 Origin Condos have closed. This is a little over 60 days after the auction and , I believe, buyers were given 30 days to close.
Is this saying… even at “firesale” prices the developers still can’t get rid of their units? What does it say for the market as a whole?
Bob
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Jason,
I was interested in this article as I found it on Google. I stayed there at the first of Dec 2008 and then again just a couple of weeks ago. I have a wife and two children, both well disciplined and non destructive given they are 4 and 1. Getting to my point…. I was interested in a purchase of one of the units but all I found was a useless pamphlet with wrong numbers and an unfriendly counter girl. After hearing some of these guys above me, I am guarded to even inquire. Got any better deals with views and off the beach like this? Cudos on your article. Well versed. Bravo!
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