Destin Market Bottoms Out in 2006

The best thing about a real estate market bottoming out is the fact that it only has one way to go, and the Destin real estate market is definitely showing all the signs that it is back on track to improve in 2007.

Sales of single family homes, condos and townhouses fell 41% in 2006 from 2005 in Destin and South Walton. Some 1,711 units sold in 2006 compared to 2,926 closing escrow in 2005. The difference marks the lowest number of real estate sales in the market for more than five years, and represents a market that stalled out in 2006 but did not freeze.

Furthering evidence that the market has bottomed out were only 71 closed transactions during the month of December, 2006, the lowest number of sales in the market’s growing history. There were only that few sales in the area back in the early 1990's when Destin was a less densely populated area. Since the early 1990's the area has boomed with new construction of homes, condos and townhouses, growing into a much larger resort destination.

The construction of new condos and homes is still on-going in the market, despite slower sales.

Pending sales are also strong in the market with 471 units that are due to close. More than half are preconstruction condo sales, which take as long as three to four years on average to close. But the number still represents that the market is showing long term strength and continued growth.

Additionally, the inventory of property on the market in the Emerald Coast Association of Realtors multiple listing service has been decreasing for three successive months. Many owners have been either unrealistic in their asking prices or refusing to sell for lower prices than they had hoped to get.

The Destin and South Walton market, however, is clearly on the road to lower prices, loosening up the market to stimulate more buyers to make purchases. Prices dropped an average of 15 to 20% from the market’s peak by the end of 2007 with some higher price range properties even dropping more.

The market hit its recognized high peak in June, 2005 at which time Hurricane Ivan followed by a series of other hurricanes, including Katrina sent a chill into the marketplace.

The buyers market that it produced has now shown all the signs of stabilizing and sales of homes and condos are forecast to increase by real estate economists in Destin and South Walton by spring time.