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The Ups & Downs Of Condo Real Estate In Northwest Florida
Sales Volume Improves As Prices Fall
By Selena Chavis
There are many instances where business owners would like to re-visit the past. But that's not likely the case when it comes to condominium value.
Click here for a visual analysis provided to Condo Owner by ResortQuest Real Estate showing a strong indicator of trends in the resort condominium real estate market.
According to local real estate professionals along the Florida and Alabama Gulf Coast, the outlook for condominium sales has improved significantly since earlier this year, but, unfortunately, the average selling price resembles figures that were seen in 2002 and 2003, according to Anita Williams, broker/owner of The Realty Firm in Destin and president of the Emerald Coast Association of Realtors (ECAR).
"We are seeing more condo sales—and more going into that pending category—but that's all related to prices," she said. "There still plenty of inventory right now. It's a buyer's market."
Jason Koertge, local real estate watcher and editor of PCBDaily.com, agreed pointing to statistics compiled by the Florida Association of Realtors (FAR). "Everything is up regarding volume sales, but the prices are still down," he explained. "I think they will continue to come down. The thing that continues to drive the price down is the surplus in the market."
For the first time in many months, the statewide median sales price in May for existing homes and for existing condos rose over the previous month's figure.
FAR reported a 21 percent rise in statewide sales of existing condos in May when compared to the same month 2008. Also, existing condo sales rose 3.8 percent in May over the total units sold in April.
Jeannie Quave, broker at Edgewater Beach Realty in Panama City Beach, said that the average price of condominium contracts has been extremely low—mid $400,000s or less. "We have sold more homes and condos in the $200,000 range than we have ever before," she said.
While statewide numbers are moving in the right direction, condo sales across the gulf coast appear to be holding their own.
According to statistics compiled by ECAR, condominium sales along the Emerald Coast were up in March and April, showing an increase of 57 percent since the beginning of the year but down just 10 percent over 2008. Average days on the market improved over 2008—down to 199 in April compared to 219 the same month last year.
"Flat" is the word Chris Arnold, a Realtor for Prudential Shimmering Sands in Panama City Beach, used to describe re-sales of condominiums in his Panama City Beach Market Updates (blog.panamabeachrealty.com) for January through March 2009. Aside from pre-construction sales and a local auction, the numbers represented little change over the previous year.
"It is notable that I did not count preconstruction sales in these monthly sales comparisons. I do this to show a normal absorption rate in the market," he said. "Foreclosures are causing considerable price corrections for many condominiums and floor plans. We are also noticing other listings adjusting pricing as a direct result of these foreclosure prices."
Koertge added that foreclosures and short sales are becoming the buzz words of the real estate sector. "Four to five years ago, foreclosures were a hot topic, but it was very much like a lottery," he said, noting that many people weren't necessarily getting the deals they imagined. "Now, it's very much a reality. People are buying foreclosures left and right."
Short sales are also popular buys for savvy investors, according to Quave, but have become somewhat of a "nightmare for real estate."
"Banks are so backed up [with short sales] that it takes weeks or months to get communication with the loan officer sometimes," she emphasized. "It's a waiting game on the short sales. It's painful for buyer, seller and Realtor."
Financing has also become a bit of a challenge as banks have tightened their belts in terms of credit. “That’s part of the reason I think these lower-priced units are selling. People can come up with the cash,” Quave said, adding that cash buys were a trend in the marketplace currently because buyers need extremely low cash to debt ratios to get financing for condos. “Banks have lightened up some, but it’s difficult to get good financing for clients. We’re having to work harder and look harder for resources.”
In Baldwin County Ala., overall real estate sales were up 10 percent in April over the same month in 2008, while the median sales price dropped 23 percent. On another note, the overall inventory dropped 12 percent.