Panama City Beach has experienced tremendous declines in real estate values since the market feeding frenzy of 2004-2006. When this market was sizzling, a significant amount of the overall appreciation for improved properties was attributable to the underlying lot value.
The significant market correction that has taken place over the last several years has the same common denominator – the land.
Notice the change in the median sales price of residential land on Panama City Beach over the last 22 quarter periods. Even in the case of improved properties, the depreciation percentage is not so much the structures themselves, but the underlying dirt.
The large oversupply of inventory, limited demand, and slow down of new housing starts continue to impact this market segment. The famous quote of Mark Twain’s “buy land, they’re not making it anymore” doesn’t really ring true at this time.
Have you seen any similar occurrence in your market area ?
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What a great chart! That is a huge decline in land value. Your summary is short and to the point and I love use of the Mark Twain quote. I have seen the same thing happen in my market area, just not as big of a decline. Lots were selling at a premium during the housing boom. Construction came to a halt and now lot prices have dropped significantly due to a huge over supply of vacant lots, a decline in housing starts, and an over supply of homes on the market.
Thanks so much for the comment, Bryan. Yes, significant change in many of our areas over the last several years.