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.
After a 10% increase in 2018, we are up 3% so far this year. Sales volume is down 40% compared to the same period last year. Preconstruction owners made up much of our inventory supply for years. This supply is quickly diminishing and returning us to sustainable sales volumes. Strict lending standards are keeping our condo market free from outside influences.
With only two months remaining in 2018 condo sales prices are up 10% year to date. Sales volume is up 12% compared to the same period last year. Fourth quarter sales volume is going to be significantly impacted by Hurricane Michael. This will be covered in further detail later. The majority of supply is being provided by preconstruction owners who have still not seen prices fully recover. We are seeing demand from people who want to own condos in Panama City Beach. While buyers are paying attention to the numbers, we have not seen speculators buying Panama City Beach gulf front condos. We can attribute this to strict lending standards preventing noncredit worthy buyers from entering the market. This is providing a balanced market free of outside influences.
Following an increase of 10% in 2018, we are already up by 6.9% in 2019. Compared to the same period last year, the sales volume is down by 21%, but still higher than we expected. Since 2011, we have been able to see a healthy balance with our sales volume performance. I am not seeing any signs of what would be considered as a ‘real’ pre-construction supply. As such, sales price increases and a steady volume all reflect the fact that Panama City Beach is continuing to improve, mature, and grow as a vacation destination.
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.