Real Estate Market Updates
We provide you a current real estate market report at six to eight week intervals. These reports offer you an understanding of the current state of the Panama City Beach condo sales. We know that too frequently, people find marketing information that is irrelevant or inapplicable. We have aimed not only to provide data that is relevant and practical, but to format it in a way that is simple to grasp. You will receive clear and understandable data analysis that accurately reflects the market. The information will be free of bias and will never attempt to push a sale.
Our market reports may occasionally focus on a particular condominium. Sometimes they may feature a specific building or floor layout to illustrate a point. Condos may also be analyzed in comparison to one another to illustrate a point. These reports and other articles provided here have won us many followers. We hope they prove useful to you.
Condos see third year of price increases
In 2012 condos showed promising signs of prices beginning to bounce back. In 2013 condo sales prices clearly showed the market had rebounded. What was interesting about 2013 was that even after two years of price increases, the sales volumes didn't fall off. The reason for this was that inventory was running low on some of the floor plans at their current pricing levels. Meanwhile other floorplans that had not seen absorption for years were beginning to pick up the slack. The lack of inventory really became apparent in 2014. Even though we had price increases of 10% in both 2013 and 2014, our sales volumes were off by 21% when compared to the previous two years. I expect this trend to continue in 2015.
At the end of 2012, my yearly review showed how condominium prices reached a low point between 2011 and the start of 2012. This bottom point was coupled with an increase in value by 20 to 30 percent during 2011 and 2012 for the most popular buildings. Now the overall market is recovering, but at a slower pace. For some buildings and floor plans, we have no inventory. Most of the available inventory has asking prices that are at least 10% higher than they were a year ago. Short sales and foreclosures are still coming on the market but at a much slower pace and at higher prices.
In 2015, we saw the prices of condominiums increase for the fourth consecutive year. Even as prices rose, sales volumes remained strong. The vast number of sales were condos built since 2000, but there was a continued increase in annual sales volumes for older units because of the price increases on newer condos.
We noticed over the year that most of the condos that sold have floor plans that bring a lower price per square foot. For instance, a two-bedroom floor plan in which the bedrooms are not located on the water will sell for considerably less than a two-bedroom floor plan in which the master bedroom is positioned on the water. Below are several graphs that demonstrate the trend that we are seeing.
The trend of dropping sales volumes that we were focused on in June 2014 took a pause in July. We have noticed that our sales volume has decreased by 19% over what it was in 2013 as well as a 19% decrease for the same time period in 2012. From January through July of 2014, we have sold 397 gulf front condominiums. That is compared to the sale of 475 condominiums during the same time period in 2013 as well as 476 condominiums in 2012. We are entering a new market where we see the volume of sales for 2014 has declined. Inventory has become scarce as pricing increases over that of a year ago. Are condos selling? Yes they are, just at a slower pace.
A look back at 2016 condo sales in Panama City Beach
The 2016 Panama City Beach condo market was a bit of a mixed bag. The average sales price per square foot for condos built in the area after 2001 are down less than 1% from last year. This year saw some floor plans increase in price while others were flat or fell lower. There is still a healthy demand for condos as the area continues to improve and mature. Strict financing requirements are providing a healthy market free from speculators and flippers.
Loan rates for condominiums edged up one-quarter of a point last week following an unexpectedly strong May jobs report that caused bond yields to go up. Rates were briefly at 4.5% on a five-year ARM before falling back to there normal range. I think interest rates will have to go higher before we see any effect on Panama City Beach's condominium market. You can get more detailed loan information in my condominium loans in Panama City Beach article.
Unsurprisingly, 2015 has been off to a slow start for selling condominiums. Today, sellers are demanding for higher sale prices on their condo listings. This in turn is resulting in few buyers who are willing to spend those prices. With no supply of distressed sales, this is the new real estate market in Panama City Beach. Foreclosures and short sales rarely happen anymore and when they do reach the market, these properties are sold at the retail price.
The average 2016 sales prices for most condominium floor plans are continuing to increase, though they are doing so at a much slower rate than in prior years. But not all condominiums have seen price increases this first quarter. Some condos are experiencing decreasing average sales prices and a few that have yet to see a sale this year.
Our sales volumes are also down 10% compared to the 2015 January through April time period. It is important to note the current pricing levels we are seeing in many buildings. If you look at many of the condominium preconstruction prices, deduct the 20% down payment, deduct closing costs and ignore all of the upkeep costs, this is roughly the same price at which the majority of condos are selling.
We're seeing an overall theme of gradually increasing prices with sales volume falling back from the past three years' sales levels. This happens in waves (different floor plans in different buildings). There have been steady price increases over the last three years, and a large part of our sales volume occurred in floor plans located in the newer and most popular buildings.
Condominium prices have increased 5.6 percent this year. That is down from the 6.1 percent we were up in the June Market Update. It is not that prices have fallen, but that the majority of condos selling are of floor plans that bring a lower per square foot price. For example: A 2-bedroom floor plan with both bedrooms off the water is going to sell for considerably less than a 2-bedroom with a master bedroom on the water.
After three consecutive years of price increases (2013 - 10.6%, 2014 10.4%, and 2015 7%), the fourth year failed to materialize. 2016 is a mixed year for condo sales prices in Panama City Beach. On average the sales prices are down 1.8% this year. Buildings and floor plans individually have been a mixed bag.