Resort Condo Market Change Not as Severe in Destin

The resort Condominium market has been exploding nationally the past five years, but there are signs that in some real estate markets things are changing, and not necessarily for the better.

Some owners who have been trying to cash out are running into obstacles in other states with changing bylaws that have the potential to change the booming real estate condo market. Condos have appreciated an average of 106% nationally in the past five years, the largest jump in appreciation in history.

Many Condo rules are precise mainly because owners share the common space or grounds. Rules dictate parking, placement of satellite dishes, restriction of hours residents may wash cars, use swimming pools and other amenities and other aspects of living in the same development.

While some rule changes may seem minor, they are beginning to show significant effects on some real estate markets, according to Paul Grucza, past president of the Community Association Institute, which monitors such effects. Some minor rule changes have killed sales already in Arizona.

However, the impact is expected to be much less significant in the Destin real estate market and some other parts of Florida since condos have been more highly regulated in Florida than most other states over the past 10 years.

Modifications to rules are not as easy to get approved in Florida as in other states. Many require state legislative approval.

But there are other issues slowing the condo market in other parts of Florida. An over abundance of inventory is already effecting the Panama City Beach real estate market. There are 3,500 waterfront condominium units on the market in Panama City Beach.

Comparatively there are only 561 waterfront units on the Destin market, according to numbers from the Emerald Coast Association of Realtors Multiple Listing Service. Closed transactions lag behind last years booming market, but are expected to increase into the spring time.

In some states slowing markets and the changing landscape of condo rules have forced some condo associations to make rule changes. "Anytime you restrict the use of the property, you take buyers out of the market," potentially driving down the price, says Tom Farley, a lobbyist for the Arizona Association of Realtors.

Unlike many other places in Florida, the Destin-South Walton condo market only has a handful of new projects underway. Most new condo construction has been completed throughout the majority of Destin, which is running out of buildable raw land for such developments.