Condo Auction Today at Ocean Reef

Get your checkbooks ready, because there is sure to be some good deals to be had today.

At 11 am, Ocean Reef Condominiums will be putting 31 beachfront condos on the auction block. National Auction Group, the same auction company that sold 50 condos at Palazzo August 2nd of this year, will be putting on the show onsite.

With over 63 to choose from, 31 will sell regardless of price. The sizes up for auction are either 2 or 4 bedroom configurations ranging in square feet from 1,100 to 1,600.

Registration will start at 9 am with the auction to begin at 11 am.

Get Live Auction Updates

I will be in attendance, and for those of you that can’t make it, I will be sending live updates to all of you that are “following” pcbdaily on Twitter. The way it will work is that I’ll be “texting” my Twitter account from my cell phone updates on prices sold per square foot and any other exciting information happening at the auction. When I do this, everyone that is “following” pcbdaily on Twitter will be notified of the updates. When you sign up on Twitter, you can set up a cell phone on your account to be notified automatically whenever I submit any updates to my Twitter page (you can turn this feature on and off at will, actually), or you can set up to be notified by email. You can also see pcbdaily’s Twitter updates in the sidebar of the website under the heading “Twitter”.

Click here for a full list of auction terms, etc.

Real Estate Market Conditions on Panama City Beach – September

September 2008 Report – Panama City Beach

Slightly over 4.5 % of the total Beach inventory for detached single family homes sold in September, down from slightly over 5% in August. If all things hold steady, there is over 19 months of inventory on the market. As of Oct 04, 2008 there were 750 DSF listed in the Bay County Association of REALTORS® MLS System for Panama City Beach. Out of the 34 homes that sold in September, 9 were foreclosures, 1 was a short sale, 3 were builder sales and the rest were typical sales. September 08 was 17% slower than August of 08 in total DSF’s sold, 34 compared to 41. The foreclosure rate of sales for detached single family homes on the Beach fell slightly to 26.5% of all the sales for September compared to 30 % in August. The absorption rate decreased slightly from 5% to 4.5% but the overall inventory of DSF also fell from 780 to 750. Out of the 35 homes 1 canal front home sold. There were no other waterfront sales. The average price per square foot was $142, including all 34 homes. However, if we nixed the top and bottom 5 the average price per square foot actually rose to $147.16. The average days on the market for all 34 homes was 206, a 12.5% decrease compared to August, which was 236. As of October 4th there are 66 DSF under contract (about 8.8 %) and 750 listed. This is a 3% improvement over August . These numbers overall are more positive than negative and reflect a slight strengthening. This is no time for elation but any sign of encouragement is welcomed.

2.6 % of the total Beach inventory of condominiums sold in September. This indicates a 38.5 month inventory of condominiums on the Beach and the statistics are basically the same for gulf front condo’s. As of October 6th there were 1582 total condominium listings, 1090 of which are gulf front. Out of the 41 total condominiums that sold in September only 4 were foreclosures (or slightly under 10%), one of which sold at auction, 5 were short sales (about 12 %), the other 78% were conventional sales. If gulf front condo’s were considered alone, all 25 sold for an average of $264.35 per square foot. If all condos are taken into consideration, the average price per square foot slips to $224.42. The average days on market for all condo’s sold is 134 and for gulf front only, 143 . As of October 6th there are 90 condos under contract out of 1582 total for the beach, or slightly over 5.6 %, and out of that there are 40 gulf front out of 1090 listed, a bit less than 3.7%. The numbers in September trended negative for condos. The absorption rate decreased from 3% to 2.6%, the average price per square foot declined for all condos about 9% and for gulf front 9.25%. There were less than half as many foreclosures sold but a significant growth in short sales or pre-foreclosures. The silver lining is that the overall inventory decreased by 38 units.

No inventory for multi-family homes sold in September. There are 65 active listings and 2 under contract as of October 6th.

About 2.6% of attached family homes sold in September for a total of 7 sales out of 266 listings. This leaves about 38 months of inventory on the market. There were 3 foreclosures sold out of the 7 and the average days on market was 88. The average price per square foot was $178.52. There are currently 19 units under contract. This sector of the market, though slipping a bit in absorption rate by about 1%, improved strongly in price per square foot, 22.5%, and decreased in average days on market by 26%. That is the bright spot in the market this month. It ought to be noted, however, the product that sold was a newer product across the board than last month’s sold inventory.

Sold	Listed	Avg DOM	Avg Price/SF	Mo’s of Inv	Abs. Rate	Forcl	Undr Const
Detached Single Family
34	750	206	147.16	19	4.5%	26.5%	66
Condo’s Total Panama City Beach
41	1582	134	224.42	38.5	2.6%	10%	90
Condo’s Gulf Front Only
25	1090	143	264.35	27.7	3.6%		40
Multi-Family
0	65
Attached Single Family
7	266	88	178.52	22.5	2.6%	42%	19

There are some things to keep in mind. One, these are snap shot reports not movies. There can be huge swings month to month which may yield either despair or elation depending on whether there is a sharp increase or decrease.

Second, these reports relate to posted listings and sales in the Bay County Association of REALTORS MLS System. Some sales occur “for sale by owner” or at auction. The average days on market for a property to sell is based upon a selling price that is competitive with the average sale price per square foot of the units that have sold. One must even fine tune it further because the average sales price per square foot that sold ought to be more tailor fit for a particular property based on age, condition, and location.

Buyers should note that there are far more seller-sold deals moving in this market than there are foreclosures. It would be foolish to simply look at foreclosures as de facto, the best deal of all. Many sellers are equally or perhaps more motivated than many of the banks that own property. All of us need to realize that there is simply far too much inventory on the market and both REALTORS® and sellers would do the market a favor if they could pull inventory that is simply overpriced. The only way value will build again is when the absorption rate improves and inventory decreases.

If you’re overpriced now you have very little chance of moving your property. In this market, one should sell only if one must; it is not a wise time to sell if it is discretionary. Buyers should be strongly encouraged by these market conditions.

Guessing the bottom of the market is like guessing the bottom of the stock market. We have been in a three year price correction. Our airport is well underway, we have had major improvements, businesses have come to our area, our property taxes have been lowered, Lord willing we will escape hurricane season with little damage, our election cycle will be soon over, the dollar is beginning to strengthen once again, even insurance rates have been eased in most cases, interest rates are near historical lows and the war is seeming a bit more victorious than defeatist in the most recent months.

All these positives must weigh in against the challenges that we have faced both locally and nationally and we all hope, with good reason, that in fairly short order the momentum will shift and affect our market positively. (The statistics provided above were all true as of September 2008 and were the product of Bay County Association of REALTORS® MLS System.)

Scott Seidler GRI
Broker-Associate
Prudential Shimmering Sands Realty
850-774-5007
ScottAndSonjaRealEstate.com

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

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

Doc 2

Real Estate Market Conditions on Panama City Beach

August 2008 Report – Panama City Beach

Slightly over 5% of the total Beach inventory for Detached Single Family Homes sold in August, 2008. If all things hold steady, there is slightly over 19 months of inventory on the market. As of Sept 08, 2008 there were 780 DSF listed in the Bay County Association of REALTORS® MLS System for Panama City Beach. Out of the 41 homes that sold in August, 12 were foreclosures, 1 was a short sale and the rest were typical sales. The foreclosure rate of sales for detached single-family homes on the Beach is slightly under 30% of all the sales for August 2008. Out of the 41 homes, 1 Gulf front home sold, 1 Bay front home sold, and 4 canal front homes sold. The average price per square foot was $173.48, including all 41 homes, however if we nixed the top and bottom 5 the average price per square foot leveled off at $143. The average days on the market for all 41 homes were 236. As of September 08 there are 43 DSF under contract (about 5.5%) and 780 listed.

Slightly over 3% of the total Beach inventory for condominiums sold in August 2008. This indicates a 33 month inventory of condominiums on the Beach and the statistic is basically the same for Gulf front condo’s. As of September 08 there were 1620 total condominium listings, 1106 of which are Gulf front. Out of the 53 total condominiums that sold in August 2008 only 9 were foreclosures or slightly under 17%. If Gulf front condos were considered alone, all 37 sold for an average of $285.72 per square foot. If all condo’s are taken into consideration, the average price per square foot slips to $246.20. There is no significant difference of average days on the market between Gulf front and non-Gulf front, both being about 166 days. As of September 08 there are 83 condos under contract out of 1620, or slightly over 5%, and out of that there are 43 Gulf front out of 1106 listed, a bit less than 4%.

About 6.5% of the total Beach inventory for Multi Family Homes sold in August 2008, leaving approximately 15 months of inventory listed. There are 62 active listings, four of which sold in August. Of the four, one was a foreclosure (25%). Two of the four units were very old and in disrepair. This should be considered when acknowledging the average price per square foot at $74.32. There is only 1 unit currently under contract and the average days on market is 134.

About 3.5% of Attached Family Homes sold in August for a total of 10 sales out of 279 listings. There were no foreclosures involved and the average days on the market was nearly a year– 341 days. The average price per square foot was $138.80. There are currently 19 units under contract.

Sold	Listed	Avg DOM	Avg $/sf	Mos of Invtry	Absbptn Rt	Forclosure	Undr Cntrct
DSF – August 2008
41	780	236	143	19	5%	30%	43
Condo – August 2008 (All)
53	1620	166	246	33	3%	17%	33
Condo – August 2008 (Gulf Front)
37	1106	166	286	33	3%	0	43
Multi-Family – Beach
4	62	134	74.32	15	6.5%	25%	1
Attached Single Family – Beach
10	279	341	138.8	28.5	3.5%	0	19

There are some things to keep in mind. The average days on market for a property to sell is based upon a selling price that is competitive with the average sale price per square foot of the units that have sold. One must even fine tune it further because the average sales price per square foot that sold ought to be more tailor fit for a particular property based on age, condition, and location.

All of us need to realize that there is simply far too much inventory on the market and both REALTORS® and sellers would do the market a favor if they could pull inventory that is simply overpriced. The only way value will build again is when the absorption rate improves and inventory decreases. If you’re overpriced now you have very little chance of moving your property. In this market, one should sell only if one must, it is not a wise time to sell if it is discretionary. Buyers should be strongly encouraged by these market conditions to buy.

Guessing the bottom of the real estate market is like guessing the bottom of the stock market. We have been in a three year price correction. Our airport is well underway, we have had major improvements, businesses have come to our area, our property taxes have been lowered, Lord willing we will escape hurricane season with little damage, our election cycle will be soon over, the dollar is beginning to strengthen once again, even insurance rates have been eased in most cases, interest rates are near historical lows and the war is seeming a bit more victorious than defeatist in the most recent months.

All these positives must weigh in against the challenges that we have faced both locally and nationally and we all hope, with good reason, that in fairly short order the momentum will shift and affect our market positively. (The statistics provided above were all true as of September 08, 2008 and were the product of the Bay County Association of REALTORS® MLS System.)

Scott Seidler GRI
Broker-Associate
Prudential Shimmering Sands Realty
850-774-5007
ScottAndSonjaRealEstate.com

Panama City Beach Condo Market Analysis After The Palazzo Auction

The Palazzo condo building had a successful auction Saturday, August 2, 2008, with around 50 units selling. Some have heralded the event as an indication that the bottom of the condo real estate market is finally here. However, a closer analysis may have a much more sinister conclusion.

Let’s analyze the current market value of the Palazzo 2BR/2Ba units the day before the auction. The current market value defined as the highest price that would attract a buyer, given a defined marketing period.

Continue reading “Panama City Beach Condo Market Analysis After The Palazzo Auction” →

Quarter 2 Sales Comparison 2002 to 2008

The real estate market is in the toilet, right? Not so much. I mean, compared to 2005 and 2006, prices are low, but compare today’s numbers with numbers from 2002, 2003, or even 2004, and we’re not doing so bad. Sure, the average days on market is way up, but the prices today compared to prices of yester-years are not too bad.

Continue reading “Quarter 2 Sales Comparison 2002 to 2008” →

50 Palazzo Condos Sold at Auction on Panama City Beach

That’s right, you read correctly. 50 condos sold at the Palazzo Auction held on Panama City Beach totaling over $17 million in sold real estate. “The numbers were a little low, but we sold a ton and I feel confident that we did better now than we could of, say, six months from now”, said Developer Ron Durham.

What started out as a cloudy, looks like its gonna’ rain, day turned into a beautiful, not too hot with gorgeous deep blue skies, day. In attendance were over 250 people with 126 registered bidders from 14 states and Canada. Required at registration was a check for $15,000 per one-bedroom condo, $25,000 per two-bedroom condo, and $35,000 per three bedroom condo.

Continue reading “50 Palazzo Condos Sold at Auction on Panama City Beach” →

Florida’s existing housing market shows improving conditions in June 2008

As reported by the FAR:

Many Florida Realtors® statewide noted positive movement in their local housing markets in June, with an upswing in the statewide median price reported for both existing home sales and condominium sales over May 2008, according to the latest housing statistics released by the Florida Association of Realtors® (FAR).

The statewide existing-home median price in June was $205,500, up 1 percent from May’s median price of $203,300. The median price of an existing condo last month was $183,700, also up 1 percent from May’s figure of $181,800.

Nationally, existing home sales are expected to show some modest gains in the coming months, with a recovery predicted during the latter part of the year, according to the latest housing outlook from the National Association of Realtors® (NAR). “Some markets have seen a doubling in home sales from a year ago, while others are seeing contract signings cut in half,” said NAR Chief Economist Lawrence Yun. “Price conditions vary tremendously, even within a locality.”

Continue reading “Florida’s existing housing market shows improving conditions in June 2008” →