PANAMA CITY — Bay County’s real estate market is making gains, but some locations are recovering faster than others.
“In Lynn Haven and (Panama City Beach) it’s really changing right now,” said local real estate agent Scott Ingraham. “It’s becoming a normal market ... and normal is good.”
But while those markets are showing signs of improvement, Panama City still is lagging, along with other markets on the east end of the county like Springfield, Parker and Callaway, Ingraham said.
“All of the appraisers are still calling that a declining market,” he said. “I would say it’s still a buyer’s market on the east side of town.”
Real estate data company Zillow, which measures home value indices for hundreds of metropolitan areas across the country, rated Panama City as an unhealthy market based on a series of metrics that include home values, rate of home sales, rate of foreclosures and resales, negative equity and mortgage delinquency.
On a 10-point scale, the Panama City area received a score of 3.6, while Lynn Haven wasn’t far behind with a 3.7. The Panama City Beach area was rated a stable market with a score of 5.
Skylar Olsen, a senior economist with Zillow, said a high rate of appreciation for Panama City homes over the last year, coupled with 25 percent of homeowners facing underwater mortgages, are two tell-tale signs the area has not yet recovered.
“High rates of negative equity mean that homeowners are not able to sell their house,” Olsen said. “They’re waiting, and what that does is it puts a big constraint on inventory. That’s what leads to incredibly strong appreciation rates.”
While high appreciation once was an indicator of a “hot market,” things changed following the real estate boom and subsequent bust. In Florida, where real estate recovery is still behind that of the U.S. as a whole, Olsen said the two statistics are still fairly related.
“It’s far more common that when home appreciation is very high, it’s indicative of ill health,” Olsen said. “It means there’s still a lot of recovery to be had.”
Overall, Zillow estimates the value of Panama City homes rose 11 percent over the last year. The company cites the median value of all homes in the area — not just those for sale — as $107,500, compared with $175,100 in Lynn Haven and $210,500 in Panama City Beach.
The time it takes for a market to recover is also often a reflection of the area’s income.
“Those higher luxury, higher value homes generally recover faster,” Olsen said. “Affluent populations generally have more savings; you could more likely maintain payments on your mortgage. Those lower income areas fell further and generally have more to come back up.”
In comparison to other metros in the U.S., Zillow considers the Bay County area a “cold market,” or one where homes are taking longer to sell, listing prices are dropped more frequently and sellers get less than their asking price.
“All these things are related to each other,” Olsen said. “Compared to other metros, the Panama City metro is just moving slower.”
Ingraham, however, said there are still plenty of positive signs, with the market showing growth over the last five years.
“We’ve got a lot of inventory, and we’ve got a lot of buyers in this area,” he said. “We think this is going to be a great year.