Real Estate on The Rise…and Rising

 A local perspective on rising home prices and rising rates from Michael Tarleton, Sr. Mortgage Loan Officer with the Bank of England.

Average U.S. home prices gained 2.5 percent in the top 20 U.S. Markets from March to April 2013, according to the latest S&P/Case-Shiller Home Price Indices. From a year ago April 2012, home prices in these markets gained a whopping 12.1 percent.  “The recovery is definitely broad based,” according to David Blitzer of S&P Dow Jones in a release. “The two composites showed the largest year-over-year gains in seven years.”

The housing market has certainly seen its ups and downs over the past several years, but recent events have made things even more interesting than normal. Talk from Fed Chairman Ben Bernanke about possibly tapering its QE3 economic stimulus has resulted in mortgage rates climbing. In May 2013 the 30 year average mortgage rate per was 3.40%. This week it reached 4.51%.

What does this mean for home buyers and sellers?

Hopefully it means our economy is truly recovering and our financial markets will eventually return to a free market system that does not require government intervention. However, the reality is it is nothing but Fed “talk” that has caused this volatility in rates. And all the Fed has stated is that it “may” pull back its buying of mortgage backed securities later this year from $85B per month to $65B. That is still a huge amount of economic stimulus.

For the home buyer, if you are going to buy a house in the next 5 to 10 years, there is not a better time than now.

Even though rates may be higher than they were a month ago, they are still unbelievably low. The graph below from shows the national average mortgage rates from 1963 to 2012 and rates are still well below what was considered “normal” or “average” in years past.


The volatility in rates that has occurred is also an indicator of where rates are headed when the Fed finally ceases it quantitative easing. Sooner or later as the economy grows, the Fed will have to turn its attention to fighting inflation rather than keeping rates low and the way it fights inflation is by raising interest rates.

Why wait until then?

The Bank of England, has loan programs for all types of borrowers and we always go the extra mile for our clients. If you have any questions about the interest rates and how they affect your chances of owning real estate in our area, or  maybe you just a need a fast and free pre-qualification, please reach out.  You can email me at

Mike Tarleton
Sr. Mortgage Loan Officer
Bank of England

Top Stories for 2008 on PCBDAILY.COM

2008 has been a monumental year for us at pcbdaily.  We’ve seen super awesome growth, expanded our content base tremendously and have reached out to more people than we had ever expected.

Looking back, the top stories covered good times and bad, with some of the bad times being good for others and some of the good times being bad for some.

4 of the top 10 articles talked about new additions to our area, namely Pier Park and the new Panama City Bay County International Airport (I know, we need a new name, and that will be addressed in 2009).

Walking around the mall, it is sometimes hard to imagine that this time last year, Pier Park’s roads were not even paved yet.  Colorful buildings had been erect for some time, but the mall as a whole was still just under 2 months from opening.  Looking back, it amazes me how quick somethings get done.

The new airport has hit milestones aplenty during 2008.  Just a little over a year ago, the airport groundbreaking ceremony took place.  When 2008 rolled in, the airport was caught in a legal battle with the NRDC and the Fiends of PFN.

In what was expected to draw out for months, the case was totally thrown out on January 25th, clearing the Airport Authority for construction immediately. The case was in many instances described as frivolous, and was not taken seriously by the judge.  Opponents touted the failure of an affirmative vote in a non-binding referendum vote, but were never able to validate the fairness of the actual vote in regards to it being represented to all those affected.

For the new airport, 2008 brought the site from a stumpy, patchy 4,000 acre site to a cleared, grubbed site that is almost completely brought to grade with terminal parking installed, foundation work for the terminal complete, an asphalt-paved runway with some concrete and funding for a full 10,000 foot runway.

As the economy has plunged during 2008, so have real estate prices.  Now, this has been a topic of hot debate on pcbdaily.  I’ve oft been blasted by the Realtor community for spreading “bad news” and not “helping” the market by taking part in the media frenzy of negativity.  However, the reality is, those that are complaining should be putting that energy into finding buyers because now is a great time to buy real estate.

Plunging prices mean good deals for all buyers.  I understand the hesitation and skepticism, but things will not always be this way, and in 10 years, us agents will be doing our homework on thinking to ourselves that we should have bought as much as possible back in 2008 and 2009 when prices were so cheap.  3 of the top 10 articles of 2008 were specifically about condo auctions in Panama City Beach.  The Palazzo condo auction story took the cake, trailed by the Ocean Reef Auction and the cancelled Marina Landing auction.  The Seahaven auction actually made it in the top 15 and is only a few weeks old.

The other 3 articles of the top 10 articles of 2008 on pcbdaily have to do with problems at local condos and the condo market as a whole.  Laketown Wharf has been a sore topic for many with the developer being a self-proclaimed Trump with a Drawl – Jerry Wallace.

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.

With less than 70 closings, it has been largely regarded as a complete and utter failure, but Laketown Wharf yet has a bright future with Corus stepping in.  2009 should bring something good for that development, hopefully.

Anyway, enough – enjoy the articles and looking back on 2008!

10.) Marina Landing Auction – CANCELED

9.) New Airport is on Schedule – Construction Update

8.) 35 Condos Sold at Ocean Reef Auction

7.) Pier Park – Margaritaville Grand Opening in Panama City Beach (video)

6.) Construction Update – New Panama City Bay County International Airport

5.) 50 Palazzo Condos Sold at Auction on Panama City Beach

4.) Problems at Nautilus Cove Condominiums?

3). Panama City Beach Condo Market Analysis After The Palazzo Auction

2.) Pier Park Grand Opening was a Smash Hit

1.) Laketown Wharf Busts, Leaves Developer Crying

Condo Market after Ocean Reef Condo Auction

The Ocean Reef auction on October 18, 2008 concluded with a reported 35 sales.  Sounds good but they still have over 140 unsold units in their inventory.  The 2BR/2Ba units sold for $225,500, including the auction fee, which is about 20% less than recent sales of very similar Emerald Isle 2BR/2Ba units.  This tells us that there are a few buyers out there willing to buy at a 20% discount.  The Palazzo auction in August told us there were a few buyers out there willing to buy at a 10% discount.  The question is whether buyers will demand more than a 20% discount at the next auction.

We reported in July that there were over 1,300 unsold, high-quality developer units in beach-side buildings in Panama City Beach.  The Palazzo auction sold 50 units in August, the Ocean Reef auction sold 35 units in October, and Sterling Breeze closed 30 units in-house since July.  That still leaves around 1,200 unsold developer units that need to be sold.  1,200 unsold developer units most likely means more auctions and lower prices.

The local condo market continues to trend downward.  The chart later in this post indicates that sale prices as of October 2008 are down 15% compared to October 2007.  New lows are set almost every month in high quality beach-side buildings.  There are numerous examples of list prices that are below the lowest reported sale price of a particular model unit.  Foreclosure proceedings in high quality beach-side buildings have accelerated in every quarter over the past year.  The number of monthly, arms-length, market-rate sales from the 70 buildings within our database continues to decline.  The market dynamics at play in our local market and just the market inertia will most likely drag prices lower.

Is there any good news here?  If your basis for news is the year 2005, then market values have declined 50% and the world is coming to an end.  However, if your basis is the year 2002 then story is more upbeat.  Let’s look at the 744 square foot, 1BR/1Ba units in Long Beach Towers.  These units were selling in 2002 for around $175,000.  Currently, they are selling in the $215,000 range for a 23% increase since 2002.  The rate of inflation in constant dollars over the same period was 21%.  Not bad when you consider any other long lived item (vehicles, equipment, etc) you purchase almost always depreciates over time.

It is unreasonable to assume that residential property will always increase in value at a rate higher than the inflation rate.  If you extend price increases at a 2% to 3% rate above the inflation rate over a 30 year period, people will be spending more than 75% of their income on a place to live.  That is not a sustainable scenario.

Is this a good time to buy?  If price is your main consideration, the operative question becomes “is it a good time to buy today relative to what point in time”.  Certainly, today is a better time to buy than six months ago.  But is it a better time to buy today than six months from now?  The answer you will get depends on the agenda of whom you ask.  Speculation in this kind of market is not for the faint of heart.

The following is an update of our usual, no spin data from which we hope will help you in your investment decisions.  As always, if you lie to yourself about things concerning money, you lose.

We recently updated our Panama City Beach condo sales data through mid October 2008.  The graph below illustrates the number of monthly re-sales from the 70 Panama City Beach condo buildings in our database.  The 2008 monthly re-sales since July appear to be trending lower than past years.

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 May 1, 2007 so we could show the price trend for the preceding 19 months.  We chose units from a variety of buildings of different ages and sizes that had a sufficient number of sales as to be statistically significant.  The units used in the analysis were:

  • Boardwalk Beach; Opened in 2005; 1,380 SF;  2BR/2Ba
  • Calypso; Opened in 2006; 1,226 SF; 2BR/2Ba
  • Celadon; Opened in 2004; 846 SF; 1BR/2Ba
  • Grandview; Opened in 2005; 1,492 SF; 3BR/2Ba
  • Gulf Crest; Opened in 2003; 1,388 SF; 2BR/2Ba
  • Emerald Isle; Opened in 2005; 1,146 SF; 2BR/2Ba
  • Treasure Island; Opened in 2005; 1,370 SF; 2BR/2Ba
  • The Summit; Opened in 1983; 912 SF; 1BR/1.5Ba
  • Regency Towers; Opened in 1975; 1,114 SF; 2BR/2Ba
  • Sterling Reef; Opened in 2005; 1,076 SF; 2BR/2Ba
  • Splash: Opened in 2006; 1,074 SF; 2BR/2Ba
  • Seychelles; Opened in 2006; 883SF; 1BR/2Ba

The May 1, 2007 market value for each type of unit was determined by analyzing sales data from January 1, 2007 to June 19, 2007.  The sale price of each type of unit is only compared to the typical sale price of that particular type of unit as of May 1, 2007.  In other words, a unit type with a May 1, 2007 market value of $400,000 is represented as 1 or 100%.   An October 2007, $380,000 sale of that type of unit is depicted as .95 or 95% of the May 1, 2007 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 were not included.  There were 177 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 rate of price decline has been mostly steady over the past 19 months. Compared to October 2007, it appears that typical prices have declined approximately 15% over the past 12 months.  Price stabilization is not indicated.

Sam Portman

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 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

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.

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 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
Prudential   Shimmering Sands Realty

Have we hit bottom?

Has the real estate market nationwide hit bottom?  I hear Realtors all the time say that business is picking up for them.  In addition, I was looking through the New York Times Real Estate section, and not one article in the  18+ articles posted was negative.  Not one article was telling of how we are all doomed to suffer endless real estate woes for the next million years or that prices have dropped again for the umpteenth time.

The National Association of Realtors is predicting a “notable improvement” in the real estate market in the second half of 2008. Lawrence Yun, cheif economist for the NAR, said “Existing home sales could start to show a sustained increase within a few months, unless there are some additional economic problems or excessive inflationary pressure,” he said.  “We’re looking for essentially stable sales in the near term, before higher mortgage loan limits translate into more sales in high-cost markets.  The wider access to affordable credit should increase sales activity notably this summer as pent-up demand begins to be met.”

Continue reading “Have we hit bottom?”

Possible upturn in Luxury Real Estate Market

Pennsylvania-based home builder, Toll Brothers, agrees the real estate market is still soft in many areas, but seems to have bottomed out in other areas.


  • “In the Naples-Fort Myers market, sales activity is definitely up for new homes on the market at reduced prices. That’s a definite contrast to late 2007, when you couldn’t give away a home regardless of price.”
  • In the Orlando market, it takes a real bargain to interest buyers, he says. Many buyers are walking away from deposits — a trend that’s prompted the company to require additional funds as its new homes move toward completion. Continue reading “Possible upturn in Luxury Real Estate Market”

The Top Ten Reasons It's a Great Time to Buy Real Estate released a good article about the top ten reasons to buy real estate now.  The author references specifically Maricopa County a couple of times, but the reasons are still applicable everywhere.

The article talks about how there is plenty of inventory providing a great selection to buyers.  A couple of years ago, buyers often had to wait in lines, lists and “play games” just to be considered as a possible buyer.  Now, if you can dream it, you can probably find it, and at an affordable price.

I remember in the frenzy the bidding wars that were everywhere.  I remember I had this one set of adjoining lots that the buyers and sellers went back and forth on for weeks until the final sold price was 10% above the listing price.  Often if you wanted your contract to be considered, you had to give up your right for inspection/due diligence period and offer cash with no other contingencies.  Today, buyers are often afforded the time they need to make a good decision and given many opportunities to be sure the home will be right for them.

Now is a great time to buy, pricing is getting affordable, financing is becoming more realistic (not so many misleading adjustable products available) and there is a great selection that allows you to find what is right for you.

I’ve been watching the condo market pretty closely for the last couple of weeks and have noticed that several have gone under contract and many have sold.  I don’t know that prices are really coming down too much more and if you have the money and staying power, you should be buying right now.

Click here for the full article.