Just cause I’m paranoid doesn’t mean I’m wrong.

This pretty much describes our real estate market right now.  If you just look at sales prices, everything looks great – even better than great. I pulled the Median Sales Prices of area homes and condos to compare what’s happening this year vs. last year through the end of April.

Home sales

The Median Sales Price of Homes in Destin/Miramar Beach / Sandestin is up +42.9% year over year.  That is huge. How about 30A?  Up +33.8%.  Again, a massive number.  Panama City Beach? They’re up too +45.2%.  Incredible!

Condo sales  

Destin / Ft. Walton Beach (Okaloosa Island) / Miramar Beach are up 41%, 30A is up 27.5% and PCB condos are up 32.7% year over year.

The year over year price jumps for both homes and condos are amazing news, and create all kinds of excitement with sellers and the Realtors helping them sell.  No doubt.  But… there is always a but… here’s the bad news looming ahead for sellers looking to capture high prices this fall. Am I Chicken Little or are there real threats out there?  You decide.


Here’s what we are watching

1. Prices of homes and condos at the beach: We just said they are through the roof.

2. Inflation: Prices of everything else is also through the roof.  Gas, food, stuff… rental prices for places at the beach! According to the Bureau of Labor Statistics the Consumer Price Index is up 8.5% year over year which was the largest 12-month advance since December 1981.  Note: In the graph below the shaded areas represent recessions as determined by the National Bureau of Economic Research.

3. The Price of money (Mortgage Rates): The cost to finance a purchase of a second home or investment condo at the beach is climbing.  Greg McBride, CFA, chief financial analyst for Bankrate, says. “With inflation still accelerating and the Federal Reserve on the cusp of starting to run off their bond portfolio, all signs point to higher rates,” He then went on to say, “In May, the benchmark 30-year fixed mortgage rate will be between 5.5 percent and 5.75 percent for the first time since 2009, and even 15-year fixed rates will climb to around 4.75 percent to 5 percent.”

People, it ain’t getting any cheaper or easier to buy a home or condo at the beach.

4. Social Media: What are people saying on social media?  This is a useful barometer that will tell us where “perception” is and where it’s going.  We are seeing more talk from Realtors commenting on how surprised they are that their listings are not getting more interest and that the listings are… sitting.  This caught my eye, there are now mortgage lenders commenting how they are worried about losing their jobs because the number of loans has dropped so much.  We are also seeing videos popping up predicting and explaining why the housing market is about to turn.  All these are indicators that sellers looking to capture a high sales price should watch and consider.

When Affordability Drops… Prices have to…?

The trends mentioned above are causing affordability to drop and that is a significant problem for sellers- no doubt.  The other problem sitting just under the surface and possibly more problematic is perception. What do I mean by that?  Well, if buyer’s start to perceive prices will be lower tomorrow, next week, or next month they will invariably decide to wait to make offers.  The result will be tremendous pressure on sellers trying to hold their price and invariably a seller will break from the pack and drop their price setting off a race to the bottom.

Is there and evidence of that yet? Possibly. Let’s look at the year over year results for Number of Properties Sold ending in April:


Homes Sold:

  • Destin / Miramar Beach / Sandestin: -36.2%
  • 30A: -41.9
  • Panama City Beach: -22.8%

Condos Sold:

  • Walton Beach | Destin / Miramar Beach Condo Sales: -28.8%
  • 30A Condo Sales: -25.0%
  • Panama City Beach Condo Sales: -44.8

Break out the Crystal Ball and let’s look at the future.  The number of properties (homes and condos) sold is down dramatically year over year and the two questions that jump out at me are: 1. Why? and 2. Will this trend be temporary or is this going to be with us for a while?  I believe the answer to both questions is the same one and that is… Affordability.  When prices get so high that folks can’t afford to buy even if they want to, or they simply choose not to buy even though they can… that is when the market turns, and prices start to correct.  Are we there yet?  I don’t know but the trends – right now – seem to be pointing that way.

Where do buyers and sellers go from here?

The honest answer is… it depends on your financial goals and the current market conditions.

  • Long Haul Holder (Seller or Buyer): If you are in it for the long haul (5 years or longer. Longer the better.) and you can afford to hold on then we recommend that you ride it out and wait for the market to come back.  Over time it always does.
  • In for the Short Run (Seller or Flipper): If you are a short time player (5 years or less) we recommend that you sell now and mitigate risk of a quick drop in price. Protect your equity while we know the demand is still pretty strong and a high price is still a pretty good bet.

Bottom Line –  Call or text Us: 850-420-9825  

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.

PS.  Something to think about: Check out this short video Recession Proof Your Money about what you do with your money in a recession.

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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