U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > Florida
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
 
Old 11-08-2007, 04:44 AM
 
Location: Wherever my feet take me
272 posts, read 1,372,888 times
Reputation: 424

Advertisements

I just read a really sobering article in the News Herald about the state of the real estate market (especially the condo market) in Panama City Beach, and wondered if anyone in the area can comment on how accurate it is?

Here's a quote:
Quote:
Two years ago, Portman’s investor signed a pre-construction contract at Laketown Wharf for a $350,000, three-bedroom and two-bath unit. Under typical terms, he made a down payment deposit of $75,000 and planned to obtain a mortgage for the remaining $275,000 and another $20,000 for furniture and appliances.

Today, with Laketown Wharf closings tentatively slated for November, the investor faces a hard decision, Portman said. At closing, the buyer will come into possession of a $350,000 condo that in the current market is worth only $315,000 at best — and that is before the monthly cost of ownership.

Assuming a 6.5-percent mortgage rate, monthly expenses for the unit would average $1,548 for principal and interest, and another $1,040 for utilities and insurance, totaling $2,588, Portman said. Offsetting those expenses would be an estimated $1,666 in monthly rental income, requiring the owner to fork over another $900 to $1,000 per month to cover those expenses.

Using a variety of assumptions involving debt structure, real estate commissions and other variables, Portman calculated eight scenarios for the condo unit’s value over a five-year period. In only one of the eight pathways did the condo’s value exceed the owner’s investment after five years. In the other seven scenarios, the owner’s investment ranged from $44,000 to $166,000 in negative value after five years.

Portman said his client has decided the best option is to walk away from the deal, forfeiting the down payment.
See the whole article: 'Perfect Storm' (broken link) Is it really that bad?
Quick reply to this message

 
Old 11-08-2007, 09:45 AM
LM1
 
Location: NEFL/Chi, IL
833 posts, read 759,321 times
Reputation: 344
I didn't read the article, but I can say that yes, it really is "that bad" for irresponsible investors.

"Condo flipping" became the official state pastime and most everyone knew that there would be a piper to be paid as soon as real estate stopped appreciating (which, believe it or not, huge numbers of people believed couldn't ever happen) and people couldn't flip their pre-buys ahead of the mortgage man.

From the developer end, it was a game of pure math.
They knew they could buy an oceanfront (or ocean area) parcel of land for ($X), they could build (Y) individual condo units in a larger condominium structure for ($Z).

The prospective value of (Y) when presold as individual units, greatly exceeded the costs associated with ($X) + ($Z), so the developers made out like bandits. As long as real estate values continued to rise, developers could pre-sell new units slightly 'under' the delusional market value and very quickly recoup their investment on the backs of irresponsible and financially illiterate, greedy morons who were willing to incur huge amounts of personal debt so they could speculate on real estate they absolutely couldn't afford.

Really, cheap money is what caused it all. When people making $17,000 a year were able to obtain $250,000 mortgages, there's something terribly wrong. Of course, there were a few people who started off making $17,000 and are now personally wealthy because they took advantage of that lending climate and were smart about managing their affairs.
Quick reply to this message
 
Old 11-09-2007, 08:50 AM
 
Location: Florida
272 posts, read 1,406,736 times
Reputation: 157
It's very accurate.
I first moved to PCB in 2001 and it was a quaint old school beach resort. It was like traveling back in time to the 1950's. There were very few condo towers. The vast majority of the hotels were no more than 3 stories high and they were the mom 'n pop types of places. You could actually see the beach between the buildings and there were no giant towers to blot out the sun. Driving on Front Beach Rd. was enjoyable. I used to work on the beach in a 2 story office building that was right across the street from Pineapple Willie's. I could see the beach from my office window. They have since torn down the office building and planted the hideous monstrosity that is Laketown Wharf on top of it. Laketown Wharf is an ugly beast that looks like a Soviet era apartment block. From what I understand it is mostly vacant. So basically they ruined a once enjoyable area for no reason.

The article didn't exaggerate. I live over in Fort Walton Beach now but I go over to PCB fairly often. Two years ago they were tearing down the mom 'n pop places and there was nothing but cranes as far as the eye could see. It was like a forest of cranes and there was a lot of construction noise. When I was over there last month, there was almost no construction going on, the cranes were gone, and there were a lot of condo towers with very few cars in their lots and even fewer lights on at night.

I'm not completely opposed to progress but over there, as in other parts of the state, the development was gratuitous and poorly planned. Traffic in PCB is already terrible in the high season and they wantonly added thousands of new condo units without any major changes to the beach roads or other improvements to the infrastructure. At this point, it is probably a good thing that there aren't that many people there yet or it would be a nightmare. The worst part is that the buildings now almost completely block the view of the beach from Front Beach Rd. and they blot out the sun. What was once a warm, sunny drive is almost now entirely in the shade. The only benefit I can see to the giant wall of condos is that they will make a nice wind break for the rest of the island during a hurricane.

What's happening in PCB is happening all over FL, especially where speculators snapped up condos pre-construction anticipating a huge payday when they flipped them. They can't flip them and they can't afford them so they are trying to back out of contracts, walking away from large deposits, or allowing them to go into foreclosure. There is no shortage of vacant condos in this state and many planned condo projects are being abandoned and the lots are for sale. It will be even worse next year when the units still under construction are added to the inventory. The only way they will solve the problem is to drastically lower the prices in order to compensate for the increases in taxes and homeowner's insurance.
Quick reply to this message
 
Old 11-09-2007, 01:45 PM
 
Location: Old Town Alexandria
14,505 posts, read 23,771,456 times
Reputation: 8838
Quote:
Originally Posted by Baja Boomer View Post
I just read a really sobering article in the News Herald about the state of the real estate market (especially the condo market) in Panama City Beach, and wondered if anyone in the area can comment on how accurate it is?

Here's a quote:


See the whole article: 'Perfect Storm' (broken link) Is it really that bad?

I wouldnt doubt it. Condos are a dime a dozen in Florida. Especially in this market.

Happy to be out. People are pleasant where I live now, I love the weather (I am from up north, originally) Many of my friends from S Florida are now in NE Tennesse and North Carolina. Things are changing.
Quick reply to this message
 
Old 11-09-2007, 04:16 PM
 
975 posts, read 3,433,601 times
Reputation: 263
I didn't realize the whole flipping/RE thing was affecting that part of Fla.

Quote:
Originally Posted by Baja Boomer View Post
I just read a really sobering article in the News Herald about the state of the real estate market (especially the condo market) in Panama City Beach, and wondered if anyone in the area can comment on how accurate it is?

Here's a quote:


See the whole article: 'Perfect Storm' (broken link) Is it really that bad?
Quick reply to this message
 
Old 11-10-2007, 09:40 AM
 
Location: Old Town Alexandria
14,505 posts, read 23,771,456 times
Reputation: 8838
Other than service jobs, real estate and beautiful beach what is there? I loved Ft Walton and many of the beaches there. A nice place to save up to retire, and live on the beach.

No other economy there to speak of.
Quick reply to this message
 
Old 12-01-2007, 05:54 PM
 
33 posts, read 180,010 times
Reputation: 36
Exclamation Laketown Wharf TEAM

Read more about the Developer of Laketown Wharf in Panama City Beach and his workers at Resort Properties Task Force - Highlights on Darren Zuppardo, Wallace and Rodney Bell.

Quote:
Originally Posted by Baja Boomer View Post
I just read a really sobering article in the News Herald about the state of the real estate market (especially the condo market) in Panama City Beach, and wondered if anyone in the area can comment on how accurate it is?

Here's a quote:


See the whole article: 'Perfect Storm' (broken link) Is it really that bad?
Quick reply to this message
 
Old 12-06-2007, 11:40 AM
 
33 posts, read 180,010 times
Reputation: 36
Exclamation Laketown Wharf Closings to Date

Resort Properties Task Force

Another reason not to close at Laketown Wharf in Panama City, FL. Shores of Panama across the street on the beach is closing for less that than the lowest price at Laketown.
--Shores of Panama Closings
2007-12-06 06:17:04 GMT
Author:Anonymous
SHORES OF PANAMA INC 9/6/2007 9:25 HAGLER KENNETH DALTON U105 SHORES OF PANAMA I $156,900
SHORES OF PANAMA INC 9/26/2007 11:59 LEVINS MARTHA KENNEDY UNIT 106 SHORES OF PANAMA I $156,900
SHORES OF PANAMA INC 8/8/2007 8:59 MORRIS MARK U1705 SHORES OF PANAMA I $165,900
SHORES OF PANAMA INC 9/18/2007 12:59 RUSSELL TODD M UNIT 1706 SHORES OF PANAMA I $165,900
SHORES OF PANAMA INC 8/7/2007 9:14 WINDHAM DONALD W U405 SHORES OF PANAMA I $166,900
SHORES OF PANAMA INC 8/21/2007 9:16 GOODE JAMES T U206 SHORES OF PANAMA I $167,900
SHORES OF PANAMA INC 7/25/2007 8:53 BACHRACH JIM N UNIT 2105 SHORES OF PANAMA I $176,900
SHORES OF PANAMA INC 8/21/2007 8:19 MCCAFFERTY MARTY J II U1205 SHORES OF PANAMA I $176,900
SHORES OF PANAMA INC 7/17/2007 15:38 ANDERSON KELLY R U906 SHORES OF PANAMA I $177,900
SHORES OF PANAMA INC 9/28/2007 15:12 COLSON DAVID I U706 SHORES OF PANAMA I $177,900
SHORES OF PANAMA INC 7/20/2007 14:01 MAYFIELD HOWARD CHANCE UNIT 2306 SHORES OF PANAMA I $180,900
SHORES OF PANAMA INC 7/5/2007 14:31 BERRY RICHARD K UNIT 506 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 7/6/2007 14:13 HANKINS JEREMY RAYMOND U1906 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 7/12/2007 15:14 WARD MILTON B UNIT 1305 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 7/19/2007 8:36 VELASCO REGINA UNIT 1406 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 7/25/2007 13:56 HAYES LARRY STEVEN U305 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 7/31/2007 12:04 SANDLIN GARY U1306 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 8/7/2007 10:35 HOUSE BUYERS LLC U1006 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 8/17/2007 11:09 LAPLANTE GREGORY U1905 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 8/17/2007 12:15 AUSLEY JAMES R U2106 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 8/22/2007 11:35 BROCK WINSTON B U905 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 8/23/2007 13:14 REZNIK STEVEN U2005 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 9/6/2007 9:20 WILLIS VICKI U605 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 9/7/2007 10:55 SHIPMAN JEANNIE M U1506 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 9/26/2007 12:47 DUNCAN INVESTMENTS LLC U805 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 10/5/2007 13:59 JOHNSON STEVEN L U505 SHORES OF PANAMA I $189,900
SHORES OF PANAMA INC 7/12/2007 15:03 FARISH LINWOOD F UNIT 410 SHORES OF PANAMA I $218,900
SHORES OF PANAMA INC 7/19/2007 8:39 GRAHAM GREGORY L UNIT 1110 SHORES OF PANAMA I $218,900
SHORES OF PANAMA INC 8/21/2007 15:12 BRANTLEY SALENA UNIT 1509 SHORES OF PANAMA I $221,900
SHORES OF PANAMA INC 8/23/2007 13:47 DREIER KYLE U1708 SHORES OF PANAMA I $221,900
SHORES OF PANAMA INC 8/31/2007 9:51 MCGARAHAN CHRISTOPHER U1709 SHORES OF PANAMA I $221,900
SHORES OF PANAMA INC 7/27/2007 15:15 LEQUATTE CRAIG U609 SHORES OF PANAMA I $225,900
SHORES OF PANAMA INC 8/22/2007 11:10 HESTON PHILLIP E U308 SHORES OF PANAMA I $225,900
SHORES OF PANAMA INC 9/14/2007 14:22 HAGLER KENNETH DALTON UNIT 408 SHORES OF PANAMA I $225,900
SHORES OF PANAMA INC 7/3/2007 13:06 HENDRICKS BARBARA ANN UNIT 1409 SHORES OF PANAMA I $235,900
SHORES OF PANAMA INC 7/10/2007 12:39 HILTON HOWARD ******** UNIT 2108 SHORES OF PANAMA I $235,900
SHORES OF PANAMA INC 7/13/2007 14:57 BOWER BONNIE UNIT 1209 SHORES OF PANAMA I $235,900
SHORES OF PANAMA INC 8/14/2007 15:13 VANDERFORD JAMES T UNIT 1908 SHORES OF PANAMA I $235,900
SHORES OF PANAMA INC 9/4/2007 14:40 RILEY JEFFREY B UNIT 1609 SHORES OF PANAMA I $235,900
SHORES OF PANAMA INC 9/4/2007 15:58 LACEY RUSSELL UNIT 1808 SHORES OF PANAMA I $235,900
SHORES OF PANAMA INC 9/7/2007 11:24 WILLMON BENJI R U1309 SHORES OF PANAMA I $235,900
SHORES OF PANAMA INC 7/20/2007 8:15 HANSON STEPHEN W UNIT 1009 SHORES OF PANAMA I $239,900
SHORES OF PANAMA INC 7/31/2007 12:14 ARENDELL STEPHEN J U809 SHORES OF PANAMA I $239,900
SHORES OF PANAMA INC 8/9/2007 11:09 DZWIERZYNSKI WILLIAM UNIT 208 PANAMA I $239,900
SHORES OF PANAMA INC 8/10/2007 15:01 PARTRIDGE LARRY F UNIT 808 SHORES OF PANAMA I $239,900
SHORES OF PANAMA INC 8/21/2007 14:35 MAGNOLE JOSEPH V SHORES OF PANAMA I A CONDO $239,900
SHORES OF PANAMA INC 9/7/2007 11:00 WILLMON BENJI R U708 SHORES OF PANAMA I $239,900
SHORES OF PANAMA INC 9/14/2007 8:44 SMITH RICHARD A U209 SHORES OF PANAMA I $239,900
SHORES OF PANAMA INC 7/17/2007 15:30 MILLIRON THOMAS W UNIT 2216 SHORES OF PANAMA I $243,000

--Shores of Panama Closings
2007-12-06 06:17:33 GMT
Author:Anonymous
Laketown Wharf closing to date...much higher than Shores of Panama with no beach. Should you pay more for none beach front property?

FullName RecordDate CrossPartyName Comments Consideration
LAKETOWN WHARF LLC 11/26/2007 10:34 WETHERILL JOAN UNIT 935 LAKETOWN WHARF CONDO $282,900
LAKETOWN WHARF LLC 11/26/2007 11:14 DOWNES BRIAN K UNIT 236 LAKETOWN WHARF CONDO $282,900
LAKETOWN WHARF LLC 11/30/2007 10:02 SATTERFIELD JOHN RAYMOND UNIT 1336 LAKETOWN WHARF $282,900
LAKETOWN WHARF LLC 11/26/2007 10:54 GOLDBERG JOEL A UNIT 2135 LAKETOWN WHARF $322,710
LAKETOWN WHARF LLC 12/3/2007 11:08 KIRSCH DAVID J UNIT 430 LAKETOWN WHARF $338,900
LAKETOWN WHARF LLC 12/4/2007 11:13 KIRSCH DAVID J UNIT 330 LAKETOWN WHARF $338,900
LAKETOWN WHARF LLC 12/3/2007 11:08 GENTRY JAMES R UNIT 131 LAKETOWN WHARF $340,900
LAKETOWN WHARF LLC 11/26/2007 11:07 GARRETT JEFFREY MARK UNIT 2028 LAKETOWN WHARF $355,900
LAKETOWN WHARF LLC 11/26/2007 10:48 MOUNT ROBERT L U934 LAKETOWN WHARF $459,900

Laketown Wharf Closings to Date


--
Quick reply to this message
 
Old 12-06-2007, 11:50 AM
 
Location: Florida
2,209 posts, read 6,912,929 times
Reputation: 599
I have a client who purchased a pre-construction condo in Miami Beach, at roughly $1,000.00/sq ft. It's still not finished. He has zero intentions of ever living there , much less in the state of Fla ( he's in the northeast ).

I would imagine since this adventure started he's sucking wind now.
Quick reply to this message
 
Old 12-06-2007, 12:09 PM
 
47 posts, read 106,802 times
Reputation: 28
You can focus on things being bad or things being good, it's all a matter of point of view. There are however, a few issues to consider. If you are going to invest in real estate, you better know what you are doing. If you don't pay for an education or mentor then you learn the hard way, experience.
Most pre-construction condo buyers were in a get rich quick mentality. Any savvy investor knows:
1. Condos are like glorified apartments.
2. There is a common area which means added fees.
3. Most Florida condos are near water which means very, high insurance rates.
4. Condo buyers are a special breed so your market is limited.
5. HOA fees are a norm.
There are other issues involved. Then as one poster puts it, location. What is available in that market for growth in all areas to warrant buying there? What are the future development plans for that area by the county and city government?

So I agree with Dreamomontery - condos are a dime a dozen and most seasoned investors are very cautious with them. The case the original poster cited is someone who didn't do their due diligence first and then maybe the contractor had his own issues. It is smarter to buy a duplex or triplex instead of a condo, in my opinion.
Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


 
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Options
X
Data:
Loading data...
Based on 2000-2016 data
Loading data...

123
Hide US histogram

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > Florida
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top