The sale statistics from the 70 buildings in the http://www.condosaletrends.com database indicate some encouraging news for the Panama City Beach condo market. The number of sales from July through October is up 62% over the same period in 2008. That number does not include developer sales that were not listed in the MLS; however neither did the 2008 number. The prices are low enough to encourage buyers to sign contracts and the banks are more responsive to short sale offers.
Foreclosures and short sales continue to be major restraints to price stability. Bank related sales accounted for 35 of the 70 sales during October. The majority of the bank related sales were in the newer, beach-side buildings. A quick look at the properties listed for sale indicates that bank related sales will be with us for some time to come.
The market trend line is illustrated below. It is structured to show a sale price trend measured in terms of the percentage sale price as of a particular date. The starting date used was January 1, 2009 so we could show the price trend for 2009 year to date. We chose units from a variety of beach side buildings of different ages and sizes that had a sufficient number of sales as to be statistically significant.
The sale price of each type of unit is only compared to the typical sale price of that particular type of unit as of January 1, 2009. In other words, a unit type with a January 1, 2009 market value of $400,000 is represented as 1 or 100%. An October 2009, $380,000 sale of that type of unit is depicted as .95 or 95% of the January 1, 2009 sale price. The sale prices and sale dates were charted with a price trend line for each type of unit. The chart contained in the price trend analysis is a trend line of the trend lines of the sale prices of each type of unit from the 12 buildings. Foreclosure sale prices that were unrealistically low (mold problems for example) were not included. There were 99 sales used in the chart. The analysis does not try to skew the price trend in any direction. The data is just the data
The data indicates that the current market values of Panama City Beach condos have declined approximately 9% through August with sale prices tending to stabilize in September and October. We have to temper the most recent sale prices with the fact that there are still plenty of units listed for sale at prices below that of the September/October sale prices.
There are several factors at play that will continue to put downward pressure on current market values.
- Financing a condo continues to be difficult for the average buyer.
- There are still a large number of owners who have a mortgage in excess of $100,000 more than the current market value of their condo. There is no evidence that the number of foreclosure and short sales will decline in the near term.
- The supply of developer owned units that have not been sold exceeds the demand. Many appear to be working through their excess inventory, however at the current sales rate it may take 12 months to sell out. Others still will most likely take longer.
The increased number of sales and the moderating of the rate of price decline are all good news. The most optimistic forecast is that prices will drift a little lower followed by an extended period of price stability. That sure beats the free fall of the last three years.
For more information on individual buildings and units, visit http://www.condosaletrends.com.