Perdido Key Market Report and Sales Analysis- With one quarter in the books it is time to review the Perdido Key realty sales and see what the early indications may be as we look at forecasting the next 9 months of the 2012 real estate market. With the close out of 2011 there was great optimism for 2012 but January numbers proved to be disappointing. It appears now that December 2011 sales, the strongest in recent memory for a December, probably were buoyed by buyers anxious to take ownership last year. Then, February and March sales were back on track to match the strong performance we saw in 2011, which many regard the as the year of recovery for our real estate market on Perdido Key. These two months in 2012 were almost exact replicas of 2011 results although lower in average sale price. January 2012 then appears to be an anomaly. January saw 6 sales, February had 14 closings, and March realized 21 closed sales....all months averaging around $340K/sale. Further evidence of our returning to the same robust sales, with higher prices, is the pending-sales figure which stands at 26 sales averaging $390K. These properties should close in the next 60 days and gauging by anecdotal traffic reports from fellow agents we can expect significantly more closings through the end of May. My prediction is 35-38 closings in 60 days. Two other factors are worth noting in 2012...... Financed purchases are much prevalent and inventory remains very low. In a market where 70% of all purchases in the last two years were for cash now only 54% are cash deals. This could be a crucial shift if the trend continues, indicating a much larger buyer pool entering the market that is able and willing to finance. As to inventory, it has remained at or below 200 units for sale, currently 195 at the end of March. This is unsustainable and probably will bring higher prices and/or additional inventory from existing owners (or dare we imagine new construction!!). The combination of more buyers entering with financing and low inventory bodes very well for Perdido Key real estate. Lastly the "Key" has experienced an economic resurgence like we have not seen since 2004, with an incredible Snow Bird populace, superior spring break occupancy and the best advance bookings for the summer in years. This year looks to be amazing for tourism which will only add to the potential for more sales through the peak summer months. Summary and conclusions: We are in a robust real estate market that began in September, 2010 at the successful conclusion of the BP oil spill debacle. In the last 19 months there has been an average of 16 closings per month. With current inventory we will have used up all available properties currently for sale on Perdido Key unless at least 16 additional owners per month decide to sell. No new developments are in progress to add "new" units. The status quo cannot be maintained so price increases are likely or more inventory must come from somewhere to relieve the supply side pressure. The demand curve seems to be steepening, enhanced by additional buyers entering the market with financing, there-by placing additional pressures on price. It is reasonable to assume we will see at least 195 closing in 2012, matching last year's production and surpassing price points. 2011 had an increase in prices over 2010 by 6.8% although still approximately 40% off the peak of 2004/2005. The bold prediction for this year is a price increase of 7-10%. I further predict at least one developer will emerge from the shadows and announce the launch of a new project to be built on Perdido Key. I would not be surprised if at least one project came out the ground by late 2012 early 2013. The recommendation is obvious then for those contemplating a purchase on Perdido Key, buys now, or as soon as practical. If you own property you will soon be rewarded for your patience in holding on through the tough times.
ZIP Code: 32507 Location Characteristics: Upscale Resort/Vacation home market just west of Pensacola, FL and east of Orange Beach, Al stretching along the sugar white sand beaches of the Gulf of Mexico.
About Peter C. King:
I am a former Navy pilot, U.S. Naval Academy graduate, who went on to become a Delta Air Lines captain. I have had the priviledge to fly all over the world and serve with and meet some of the most interesting people anywhere. I have come home to Perdido Key in the Pensacola area to enjoy the most glorious beaches, superb boating and fishing, the Blue Angels Navy aerobatic performance team overhead, and a down home enviroment you cannot find in any other coastal community. Perdido Key is a resort locale like no other. Let me tell you about my little piece of paradise.
These reports reflect the views and opinions of their authors and are not necessarily the views and opinions of Realty Times.
