Perdido Key is a great place to start when you are looking at the market across Pensacola Beach to the Alabama beaches . Here is a look at the best "example" for those looking for information on this vacation/resort area on the Gulf of Mexico.
First ten months of 2009 sales volume was the best since 2006. We are way up over last year and approaching 2006 numbers. During the same period last year we had 95 total closed sales compared to 142 this first ten months. (Several WCI condos have sold but do not appear in the MLS due to WCI policy.) We have 22 additional properties contingent or pending . Very important is the continued decline in inventory to our current 256 units for sale. That is the lowest inventory since 2005 which was deeply affected by post hurricane issues. The proof of demand is the number of sales but coupled with this drop in supply we can expect price supports if we can get below 250 units for sale on the Key. Simply put the sales volume is out-stripping the property coming into the market…in economic terms we are seeing a faster absorption rate. Continued market improvement. Extrapolating the first quarter over historical norms should put us on a line to 155 sales and an inventory number in the 235 range by year end. Compare this projection to results of the previous two years. It is stunning, good news. The data is from the Multiple Listing Service data banks and will allow us to consistently compare "apples to apples". (Tax records can distort our analysis and lag in time.) Category - Residential / Perdido Key 2007 Month Year's Sales Avg ListPrice Avg Sale Price % Diff Sell/list Avg DOM Curr Inventory
Category - Residential / Perdido Key Jan-June 2009 January 2009 6 $403,817 $397,233 98.37% 166.0 355 February 2009 10 $315,960 $293,650 92.94% 287.0 357 March 2009 7 $459,343 $427,271 93.02% 193.0 357 April 2009 13 $405,885 $363,938 89.67% 207.0 356 May 2009 14 $405,979 $377,429 92.97% 225.0 325 June 2009 24 $386,236 $350,161 90.66% 237.0 301 July 2009 17 $444,100 $416,578 93.21% 246.0 313 August 2009 26 $468,938 $392,126 83.62% 276.0 294 September 2009 17 $514,543 $461,643 89.72% 189.0 265 October 2009 8 $304,664 $278,521 91.42% 296.0 256 Total/Averages 142 $407,603 $373,793 91.71% 227.8 256
In summary then…..I think we will have a typical rate in unit sales through the last quarter, continued whittling down of inventory, but likely no significant price increases until January-March 2010. Credit concerns may impact the overall picture. I think the inventory will be in the 235 units range by January. This number will be directly impacted by the number of properties being held off the market awaiting the further recovery in price points. Absorption will be key between now and March 2010. I know from anecdotal evidence (many conversations with my client base) that there will be a significant number of condos brought on the resale market as owners perceive they can get their price. The absorption rates to this point in 2009 have been a true positive sign in the Perdido market but a flood of inventory could derail price increases from these lows. I think we need to be below a 2 to 1 average annual ratio for Inventory/Sales. We will have below 250 in inventory and we will have sold more than 150 units (I predict 155) by year's end so we will make that guide post. That ratio defined a great market in 2005, (post Ivan numbers in Dec2005 were 391 available and 215 sold) so I look for great year end numbers on Perdido. The monthly sales number to watch is 20+ units sold in an exceptional month (defining the peak price points of 2004/2005 with 200-300 units in inventory but selling at a fast clip.) We saw 24 sales in June and 26 sales in August so we are meeting that objective. Continue to watch those figures and ratios for your cues as we enter in 2010. They are your tipping points. My recommendation is to buy now in anticipation, with the knowledge that this looks more and more like recovery of the market and price points. Bring offers if you can't find your comfort zone in these list prices to flush out the still possible bargains. There are less and less obvious "deals" after this flurry of activity and condos being held back off the market but you can still find a gem in there if you get off the sidelines. Sitting on your hands now if you want to own a piece of paradise will likely cost you more going into 2010. If you own on Perdido Key, Orange Beach/Gulf Shores hold on to your property as long as possible into the next year and stay informed.
ZIP Code: 32507 Approximate Location Boundaries: With 6 hours of major cities of the Southeast, Atlanta , Birmingham, Baton Rouge, New Orleans, Nashville, Huntsville, Jackson, Little Rock
Location Characteristics: Vacation Resort Market on the sugar white sand beaches of the Florida Panhandle. Pensacola Beach, Perido Key, Orange Beach Al all share this magnificent Gulf of Mexico coastline.
About PeterCKing:
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.
