This article is part of our Real Estate category where we talk a bit about real estate in the Panama City Beach area. This post originally appeared on Blog.PanamaBeachRealty.com which often talks about real estate market conditions in Panama City Beach.
Initially, the 2010 Panama City Beach real estate market was stronger than in 2009. However, potential buyers became worried about the possibility of the Deep Horizon Oil spill, so sales declined in April and remained depressed until September. When purchasers realized that the spill would not affect the area, September 2010 sales volume increased. This still was not enough to return to 2009 levels.
There are some difficulties in evaluating the overall market data because condominiums are worth different values depending on their amenities, location and size. In order to evaluate the Panama Beach condominium market more realistically, I examined units that were close to the same size and had similar views. I determined the average square foot price of one-bedroom units on the gulf that were more than 700 square feet.
Panama City Condo Market Selection Factors
The next graph demonstrates that the same floor plan can bring different prices depending on the building. I looked at one-bedroom Panama City Beach condos for sale in the Summit, the Boardwalk and the Majestic buildings. The sales volume in the Summit was constant each year, so this condo provides a powerful graph baseline. The graph also indicates that the prices of one-bedroom units in the Boardwalk are slightly higher than prices for the same floor plans in the Majestic. Condo prices in both buildings command a premium over the value of units in the Summit.
Other Factors of Condominiums Adversely Affecting the Market
Most floor plans are continuing to see foreclosed units hit the market. These units often list at a discounted price compared to other identical floor plans. They are usually unfurnished and often need some repairs. This puts a downward pressure on pricing. When the foreclosed unit sells, it provides a comparable, which causes short sales to lower the price.
Despite this negative price pressure, a few floor plans are showing signs of a price floor, or even indicating that the market may be strengthening toward eventual price increases. I will examine unit plans in the Panama City Beach real estate market in my subsequent market analysis and provide some graphs to demonstrate the market growth. Unfortunately, many other condo floor plans have not seen any sales in a long while due to unrealistic asking prices.
It is likely that units will only start to sell when prices are lowered enough to be in line with market rates. This will happen on a floor plan by floor plan basis, resulting in excess inventory gradually being sold. As inventory becomes more limited, prices will strengthen. When realistic prices match the market demand, they will restore the stability and equilibrium of the market.
* All sales data taken from Bay County Association of Realtors