During the first quarter of 2014, our sales volume was about 5% lower than it was during the first quarters of 2012 and 2013. We sold 164 gulf-front condominiums during January, February, and March of this year, 173 during the first quarter of 2013, and 173 during the first three months of 2012.

In March 2014, we sold 58 Panama City Beach condos. In March 2013, we sold 63 such units, which means that this year's March sales decreased 7.9%. One reason for the decline is that condo prices are going up; meanwhile, distressed sales are becoming less common. Condos are selling at those increased rates -- indeed, some of the units that we've sold in 2014 have brought significantly higher prices than we've seen in recent years -- but the absorption rate is lower.

In the time I've spent selling condos, I have become very familiar with the budgets of most condominium associations in Panama City Beach. Generally, the association fees for these beachfront properties are what you would expect. However, some buildings have budgets that exceed reasonable expectations. This is often due to unanticipated building maintenance, which is the case at Long Beach. You will also see instances of associations falling behind on reserves due to unexpected expenses. In rare instances, overcharges by management can cause the dues to increase.

In this article, I will clarify what has been occurring at Long Beach and why the association fees for this property are unexpectedly high. You will find that the large restoration project needed for the condos and the loan that was required to pay the expenses are the reasons behind the high association fees. The increase is not necessarily a scary issue. In this article, I will crunch the numbers to show an easy way to value a condo with higher than expected association dues.

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.

Condo sales volume in Panama City Beach is starting off the year fairly inline with recent year statistics, which is demonstrated by the graph seen below. This is interesting because inventory in a number of buildings and floor plans is rapidly shrinking. It appears that some buildings are selling quickly while others are not seeing many transactions, thereby leading to overall sales volumes that are average. The second graph below shows the historical average quarterly price per square foot of all two bedroom gulf-front condominiums.