The Local Market :: From an Investment Perspective

From 2002-2004 the Emerald Coast often called the forgotten coast somehow got remembered and rediscovered and Panama City Beach and its surrounding area became in the eyes of many economist included a future hotbed of appreciation and investment. There was talk of a new international airport coming into the area and buzz about many other possibilities. The media from a variety of venues had rightfully noticed that our slogan "the world’s most beautiful beaches" actually had the substance to back up the statement. Comparative to other coastal areas in Florida, Panama City Beach and surrounding areas were rightly considered a superb value with prices considerably less expensive than other coastal areas such as Palm Beach, Fort Lauderdale, Miami, St. Augustine, Naples, Fort Myers, Port Charlotte, Destin, Tampa, Clearwater, etc. Buyers flooded into our marketplace and the housing market took off. There was a time when the seller's market was so biased in the seller's direction that listings many times never hit the market and if they were reasonable in their pricing their time on the market was very short. Many properties during this period of time doubled in value and were well on their way to tripling.

In August 2005 our local real estate market experienced a dramatic slowdown which in time lead to a sharp price correction. It is our observation that the storms of 04 and 05 (none of which directly hit us), the Fed raising the interest rates, the insurance costs rising due to the storms throughout Florida in 04-05, higher assessed values increasing property taxes and increased fuel all contributed to a housing slowdown . We also at that time experienced continued delays from those who were expected to move forward with the major infrastructure promises long in the making. This is of course not great news for sellers and property owners because values have come off their highs quite strongly. One can find now homes that previously sold in the mid to high 300's now selling in many instances in the low to mid 200's. Condo’s that once sold in the low 500's now available in the high 300's and land once priced in mid 200's available in some instance in the low to mid 100's. This of course is bad news for sellers but good news for buyers. Actually homeowners who purchased their properties here before 2004 should if they did no refinance to the hilt still enjoy very healthy equity in their properties. Those who purchased in late 04 -06 may have actually lost some value depending on the specific situation. I believe that we are now hovering at a bottom and that the opportunity to buy right is now and may soon be behind us. There are certain neighborhoods and certain types of property that are already beginning to regain some appreciation. There are still many excellent buys out there right now in every category conceivable and there is plenty of inventory to get a decent selection from among in most cases many options.

How long will this last? No one can with 100% accuracy predict the future but we can have a somewhat informed outlook. Currently, the following factors would lead us to believe that the buyer’s market may begin to tighten in the near future and that inventory absorption is highly likely in the upcoming year. The factors we see that will likely lead to a market turn around in the near future are the following factors:

1. Property Tax Relief.
2. No serious threat of hurricanes for past 2 years.
3. Insurance reform being consideration strongly at the state level and new underwriters coming back into a market has made in the past year insurance more affordable.
4. The price correction has brought many homes into the affordable range.
5. Infrastructure promise coming to fruition. The new international airport has received final permitting and federal funding and it is moving into the construction phase. Simons Pier Park is rapidly coming out of the ground. The Jim Fowler Animal Kingdom deal was solidified. In the past 2 years many roads and bridges have been widened, built and improved, Home Depot and Lowes have opened new stores on the beach, several new restaurants have opened, several more on the way, many of the condominiums that were being built are now complete.
6. Interest rates are finally beginning to ease once again and are still in historic lows.
7. Building costs have also become more affordable this year and last year in contrast to the seller’s market a few years ago.
8. With the increase of businesses and the airport new jobs in our area are being created.

Our areas infrastructure improvements are long term investments that will protect our market in some measure from a high level of volatility and infuse a more sturdy appreciation that may not again be as vulnerable to such a sharp market correction. In the past 2 years various articles have been written about the anticipated strong appreciation that will likely be a blessing to us considering the beauty of our area, the migration of the retiring boomers to coastal warmer climates, the amenities our area offers complimenting our beautiful beaches including some of the nation’s most attractive parks. All of this should encourage the timid to dive in. Don’t regretfully say one day, "I wish I would have" but instead "be glad you did"!

We are personally committed to being highly accessible. Unfortunately, many people in our business are difficult to actually get on the phone. We pride ourselves in serving your needs. We will work hard, smart and ethically on your behalf we do our best to be user friendly. Thus our phones are available for your calls during regular and irregular hours. If for some reason you get a voice mail rest assured that we will get back to you very quickly! Real estate purchases are some of life's largest investments and we recognize this and value our role as REALTORS® and realize its privilege and responsibility.