Panama City, Fla.: The #1 U.S. City to Buy Real Estate
In the real estate world, they say that a small city or metropolitan area needs two things to really increase its housing market’s demand:
- More people.
- Wealthier people.
Unlike most of the rest of the Florida, Panama City hasn’t really attracted either, since it’s isolated way out on the panhandle in West Florida. It’s even in the Central Time Zone, if you can believe that. But now, experts say it’s likely to catch up to the rest of the Florida housing market.
Panama City is poised to lure big airliners to its regional airport, which is being given a $300 million face lift. Much of West Florida is expected to draw a lot more visitors - and a lot more buyers now that South Florida real estate has created so many housing affordability problems.
In fact, little old Panama City was recently ranked #1 on CNN Money’s list of America’s Top 10 Cities to Buy Now.
Take a look at the gaudy stats below and you’ll see why. A Florida mortgage will sure go a lot farther up north than in traditional hot spots in South Florida - and a home bought in P.C. is projected to increase a staggering 72 percent in value between 2006 and 2011.
Median home price
2006: $223,000
2011: $383,000
Per capita income
2006: $31,000
2011: $40,200
Population
2006: 166,000
2011: 187,000
State and local governments and a top regional real estate developer, St. Joe Co., are planning a new airport by 2008 at a cost of more than $300 million, which they hope to open up North Florida the way Southwest Florida International Airport in Fort Myers helped drive that region’s boom.
“Panama City is an economy waiting to break out,” says Steven Cochrane, chief regional economist for Moody’s Economy.com.
Other factors increasing demand: Property prices are still low by Florida standards, local home loan costs remain low, and the local market has already absorbed a price correction after peaking last year.
Janet Roan, a real estate agent in Panama City, notes that a two-bedroom beachfront condo is going for as little as $330,000 - down by more than $100,000 from 2005.
There’s no question that those priced out of the housing market in much of the southern half of the Sunshine State would be advised to consider this move - as would retirees and second-home buyers. A mortgage loan can still be obtained for cheap, and the area is poised to appreciate like crazy.
The only red flags would be raised by local politicians, who many say are notoriously cozy with local home builders and have green-lighted several master-plan communities for future development.
If supply gets out of hand (as we’ve seen with inventory in South Florida), or mortgage rates rise dramatically, prices are likely to stall.