When you were young did you ever get scared that there was a monster under your bed?  And then ask your mom to leave the light on?  Just me?  Anyway, this market is making me feel a lot like that and my mom isn’t around and there is no light to leave on.  Questions are everywhere and answers are… not.  Will mortgage rates continue going up? Is high inflation going to continue? How long can these high prices hold up?  Here’s the big one: Are these issues only perceived monster’s?  Or are they going to climb out from under the bed and shut down the economy taking the real estate market here at the beach with it?

Déjà vu all over again?

I started selling real estate here at the beach in 2005 and it was crazy.  Sellers were asking for and getting anything and everything they wanted. Buyers were paying whatever they had to in order to lock up a property.  Even then, often times they didn’t get it.  It was a frothy time for sure.  Until it wasn’t.  The market turned on a dime and many sellers, bankers and investors got stuck holding properties that no one wanted to buy.  The bills still came due though and the market turned into much scarier than a perceived monster under the bed.

Interestingly enough, it turns out that market wasn’t a once in a lifetime market or even a once in a career market because I just came out of the second “frothy” market of my career.  The question is what happens next? Let’s look at the past for guidance.

Destin Area Condo Sales History

The prices of condos in the Destin Area exploded from 2002 to 2005 with median sales prices of jumping from $236,000 to $524,000.  That’s a 54.96% increase in about three years. That was then, how about now?  Recent price jumps while not quite as steep have been impressive too.  The median sales price for Destin Area condos increased from $348,000 in 2019 to $568,500 today.  A 38.78% increase in just three years.

Where does the market go from here?

When the condo market peaked at $524,000 back in 2005 and started correcting, we saw prices fall and keep falling until 2011 where they bottomed out at $220,000 which was lower than they were in 2002 when the run started. One building, Sundesin, saw prices drop $95,000 in one year.  Overall, the condo market median sales price didn’t get back to that $524,000 number until late 2021… 16 years later.  Are we at a same type of correction point now?  Will prices drop now like they did then?  Will prices take as long to come back?

See Panama City Beach Real Estate Trends

Destin Area Homes Sales History

Prices for homes followed a similar path. Median sales prices in 2002 were $259,900 and climbed to $680,000 just five years later in 2007.  That’s a massive 61.77% increase.  How about now?  During this last five year run we have seen the median price of homes in the Destin Area explode 52.07%, going from $635,000 to $1,325,000.

Where does the market go from here?

The home market peaked back in 2007 and started correcting fast. Prices dropped from $680,000 in 2007 to $450,000 the next year in 2008 and kept dropping to $399,000 in just two years later in 2009.  Prices didn’t get back to that $680,000 high again until early 2020, eleven years later.  Are we at a same type of correction point now?  Will prices drop like they did back then?  Will prices take as long to come back?

See Panama City Beach Real Estate Trends

What else are we watching for clues?

The monsters under the bed that make me want to sleep with the lights on are mortgage rates, liquidity, and unemployment.  Why? These tell us where the affordability of our real estate is – both for sales and for renting.  Perhaps even more importantly if owners are going to be able to hold onto their properties as the market tighten up.  If folks can’t afford to buy or rent – or feel like they can’t afford to buy or rent – they simply won’t. That is the problem for owners need to watch closely.

Mortgage Rates

Mortgage rates are at the highest level they have been since 2008 and there are many reports that they are expected to increase again in November.  The result?  Mortgage applications to purchase a home decreased 0.4% last week and were 29% lower than the same week one year ago.  Note: these are national numbers, and all real estate is local but I’m sure our lenders here are also feeling the pain.

See Panama City Beach Real Estate Trends


The fact that everything costs more means people have less to spend on luxury items like a second home or investment property at the beach.  The other side of this coin are the people who rent.  As prices continue to climb and disposable income that funds expensive vacations at the beach dries up it is bound to have an impact on real estate values at the beach.

Liquidity will then become a massive issue.  The owners that have it and can ride out the downturn will be fine.  The owners that don’t will be forced to sell off assets to keep their financial ship afloat.  Unfortunately those forced to sell will be selling a depreciating asset in a declining market which is a tough pill to swallow.  When that starts to happen, it’s a slippery slope and a perfect set up for further price depreciation.  Will we see that?  I don’t know but people’s personal savings rates spiked when the government gave them stimulus money and have been declining since.  That doesn’t bode well for our market.

See Panama City Beach Real Estate Trends


Another monster hiding under the bed could be unemployment.  The way I see it is… if everything costs more – and it does – then fewer people can or will afford to buy stuff.  If companies are selling fewer goods and services, they will be forced to cut costs.  Most company’s largest expense is its employees.  Because of this it stands to reason that the unemployment rate should (and is) be going up.  As you can imagine, unemployed people don’t typically buy or rent places at the beach which will put further pressure on owners and their ability to ride the market out.

See Panama City Beach Real Estate Trends

In Sum – Protect your wealth

Clearly there are a lot of factors impacting real estate values here at the beach.  Are they imaginary monsters under the bed or are they something much scarier remains to be seen.  Our goal has always been to help our clients like you build and (especially in times like this) protect your wealth.

What should you do? Protect Your Equity. 



Short Term Owners

If you are not planning to hold your property for an extended period (five year +), then you should sell now while prices are still high. To mitigate your risk of quick and deep price erosion send me a text 850-217-7618 or email me at johnmoran@atthebeachteam.com and we can run the numbers for you showing you what you could capture if you decide to sell now. Then you can decide what makes the most sense for you financially. 


Long Term Owners

If you are in for the long haul (five years +) sit back and watch what happens.  The coming years could become a wealth building period for you if prices drop far enough.  Send us a text at 850-217-7618 or email me at johnmoran@atthebeachteam.com telling us that you are a buyer if prices get low enough. We can then make sure to put you on a hot sheet notification alerting you when prices drop to the level you would be an investor.  That way you won’t miss anything.

Buy and Holders

If you are considering buying a property here at the beach and holding it (five years +) then you should find the best property you can afford and buy it.  As the median sale price charts show – generally speaking – prices go up over time.  That along with tax benefits, rental income opportunities, and the ability to refinance debt if mortgage rates go down make real estate an incredible investment. Call or text me at 850-217-7618 or send an email to johnmoran@atthebeachteam.com telling me you would like to explore opportunities to invest in real estate here at the beach.  We can then set you up on a hot sheet notification alerting you whenever a property that fits your criteria hits the market.  That way you will never miss a deal.


Bottom Line

We are wealth builders, so our goal (whether you are buying or selling) is to build or protect your wealth  based on your financial goals and the current market conditions. Call us today and lets talk about how you can max out your position as a buyer, a seller or as an owner to continue building your family’s wealth well into the future.

Committed to your success,


John Moran – CEO

The Smart Beach Investor | Keller Williams Realty AT THE BEACH TEAM 

Keller Williams Realty – For Your Place at the Beach

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