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Written by Chris Arnold.

Panama City Beach Condo Market Overview - March 2025

Panama City Beach Condos for sale market update for March 2025

Sales volume this year is off to an even slower start than last year’s historic low, lagging an additional 39% below 2024.  Despite this, average prices are holding steady.  It’s still too soon to determine if this signals a broader trend.  Similarly, while it’s premature to predict rental performance for 2025, there’s no indication of improvement compared to last year.  Many associations have budgeted for increased overall expenses in 2025.  Rising building costs were somewhat mitigated by a significant drop in insurance rates.  Though insurance costs remain well above levels from five years ago, they are coming in lower than many associations had expected when planning their 2025 budgets.

Calypso And Palazzo 2-Bedrooms Drop To The Mid 600's

Panama City Beach Real Estate

Certain Condo Buildings Maintain Stability and Value

Recently, prices for Calypso Condominium and Palazzo Condominium 2-bedroom floor plans have fallen into the mid 600k range, while Sterling Reef and Splash have dipped into the upper 400’s.

Most Condominium Buildings and Floorplans are Blurring the Lines Between a Crash and Correction (15-25%)

Most buildings are experiencing additional price reductions beyond the roughly 20% drops seen last year, though there are early indications of a potential pricing recovery. Time and again, nicely updated units command a substantial premium over those that remain unrenovated.

Meanwhile, a handful of buildings are grappling with operational costs that have climbed so high that even all-cash purchases are likely to result in a negative cap rate.

Condo Sales Volume

panama city beach condos sales volume for March 2024.

The year 2025 has kicked off at an even more sluggish pace than 2024, a year that saw condo sales volume plummet to a 20-year low of 430 units. The market continues to grapple with persistent hurdles, such as sustained high interest rates, rising costs of condo ownership, and declining rental income. Even with these difficulties, select floor plans are quickly running low on available units.

Factors Driving The Pricing of Panama City Beach Condos for Sale

Supply Dynamics

Panama City Beach active listings for condominiums.

The number of active listings can be deceptive. Typically, fewer than a third of the condos listed in any given building are priced at levels that attract buyers. There's no influx of new supply since developers are currently unable to construct new units, effectively freezing the market supply. A significant majority of existing condo owners are either not facing high interest rates or are mortgage-free. More than 75% of owners bought their condos prior to the 20% price surge in 2021. This year, I've only encountered one foreclosure and no short sales.

Condo Association Costs

Panama City Beach Condo Association Dues

Condo association dues continue to rise due to inflation. Although Master Insurance Policies saw a significant reduction in 2024, with another 10-15% decrease expected in 2025. Many buildings have seen a substantial increase in reserves thanks to the new Structural Integrity Reserve Study (SIRS). Additionally, Milestone Inspections for condominiums over 25 years old have led to special assessments in some cases. 

In-Depth Articles on This Topic

Strict Condo Lending Requirements

For years, increasingly stringent lending standards have narrowed the options for financing condo purchases. All signs indicate interest rates will remain higher for longer.  You can see more details here:  Condo Loans in Panama City Beach.

Advice for Prospective Buyers and Sellers

For Buyers

  • Choose the Right Building: It's astonishing how often buyers switch buildings shortly after purchase.
  • Assess the Condo Association's Health
    • Gain insight into why the association fees are set at their current rate.
  • Anticipate Special Assessments: Special Assessments Aren't Sudden.  Understand what major maintenance projects are coming up, such as exterior painting, elevator refurbishments, concrete repairs, and fire system updates.
  • Spot and Leverage Pricing Weaknesses: Understand any price vulnerabilities and capitalize on them.
  • Calculate the True CAP Rate for Each Floor Plan (if applicable): Don't rely solely on rental projections; determine the actual Capitalization Rate for each unit type.

Your buyer's agent should offer expert and precise advice on all these points. They should guide you to make the correct decision from the outset, making the process straightforward and stress-free.

In Panama City Beach, engaging a buyer's agent us unlikely to cost you a dime, as nearly every condo listing still provides a commission for the buyer's agent. This year, I've only come across one listing without this commission, which ultimately sold for well over 6% below market value. Feel free to reach out if you'd like to explore some past negotiation scenarios. In my most recent transaction (negotiating for the buyer), the negotiated sales price resulted in an agreement (at the sellers request) where the seller paid extra documentary stamp taxes to ensure the true sale price remained undisclosed to other owners in the building.

For Sellers

Partner with Knowledgeable Real Estate Professionals

The market for condos remains active. If your property is not selling, it might be time to delve into the reasons why. Properties that have been enhanced with thoughtful upgrades and decor often sell at a higher value. It's important to have a clear understanding of your property's real market value.

Diligently Evaluate Incoming Offers

Should your agent or broker lack expertise in evaluating incoming offers and vetting lenders, you may repeatedly encounter contracts falling through.

Questions?

Feel free to contact me.

Christopher Arnold

Broker

850-625-5113

Palazzo Condominium, Panama City Beach real estate, Panama City Beach condos for sale, Real Estate Market Updates, Calypso Condominium

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