Are we at the bottom of the Beach Real Estate market? This is the question I get almost daily from the potential buyers that are hovering around our real estate market. I believe the answer to this question is: Yes we are in the bottom trough of our market in terms of pricing. This is why I think this. We have been printing out a list of foreclosed properties and mailing or giving it out to the curiously interested for about 3 months. The list has been running between 85-90 properties. These are bank owned properties listed in Panama City Beach that are all bank owned. These are properties that have been foreclosed on and are now totally owned by a lender.
Anyway, this list has consistently be running in the middle 80′s but in the past few weeks it has starting falling in numbers. Today when I ran the list it is down to 60 properties. This is a pretty significant indication that the number of foreclosed properties is declining and that we are have more of these properties sell than new ones are coming to market.
For a long while buyers were just standing on the side lines watching the prices fall. Most of the foreclosed properties are selling for around 50 cents on the dollar from the selling price in 2004-5. Finally in the past few weeks we are seeing more and more activity from buyers that have decided to wade into the market. Many are making cash offers, but the price of the properties that are now selling is usually below $200,000 so cash offers are more common at this level than at the higher price levels.
I read in the news that we are going to see more foreclosure in the coming months in the traditional housing market, but I think that our market is a different market. We sell mostly homes that are investment, or second homes to the pre and baby boomers that have been waiting for many years to buy that special second home at the beach. The increase the news is talking about in foreclosures is coming from the more traditional market where someone is actually loosing their primary home. This market at the beach where we are seeing so many foreclosures is not the typical foreclosed market you read about in the print. There have been many programs to delay and help the homeowners that are in trouble with their debt. That is why we will, with time, now start to see an increase in the number of these properties come to market. These programs can only delay the inevitable for so long and now we will see more and more primary homes come to the foreclosed market.
The situation in the second home and investment properties is that they never had any of those programs that would delay their foreclosures. They happened sooner and we have had these second home and investment properties coming to the foreclosed market for several months. This is a good bit ahead of the primary home foreclosures, who have been sheltered by some of the government programs out there.
I think we are at a bottom of the pricing for good quality beach property. The pricing will remain in this trough for possibly a year or more, but the more desirable and prime beach properties are going to be the first to sell. As time goes on the lesser desirable bargains will also find buyer.
If you ever thought you would like to own a beach property, this is the time for the best price I think we will see in a long time, maybe forever. The prices will remain low for many months, but the better properties will be gone first.