CONDITIONS™ Oct 2011 By Peter King, Local Real Estate Expert

Perdido Key Market Report and Sales Analysis- In a real estate year that could only be called unpredictable the news from Perdido is generally positive. Sales figures are a bit of a mixed bag this year to date with August definitely making up for a lack luster June/July that followed a strong spring. We look to be on a line to a better than average year for unit sales and an improvement over the disastrous 2010 average price per sale. We have closed 154 properties (29 sales in August alone) on Perdido Key in Jan-Sep of 2011 which is more than all of last year of course because of the BP oil spill. August saw a return of some of the higher end buyers with an average sale bouncing back up in the $500K range. September numbers fell off dramatically from historical norms with only 10 closings when we should expect 15-20 sales. The average sales price returned to the high $300K range. There seems to be another unexpected pause in buyer traffic as we saw in early summer. The conventional wisdom is that we are experiencing a hangover from the national economic news with uncertainty causing these swings in buyer sentiment. We still have 22 pending or contingent that will likely close out our year with 175-180 total units sold. Prices remain stable (and on the rise in some isolated complexes) and inventory is still historically low with only 211 units currently for sale. We continue to see a wider demographic buyers in the market that is finding a limited inventory. This group, loosely defined as a family in their late 30’s early 40’s willing to look at higher end properties and buy in the mid-level or above. Sellers are finding that price is still the main motivator with the lower priced units of comparable properties selling first. Our main challenge in 2011 continues to be financing where strict requirements and higher down-payments may make it difficult for some in this buyer group. The buyers, looking for financing, are the folks offering on the mid-level condos (price points between $350K-$600K) like Beach Colony, Palacio, Spanish Key and Indigo. Cash is king with 106 out of the 154 transactions being cash deals. The brightest spot is on the rental side of our resort/vacation area. Tourism was the strongest ever with a near sell-out crowd for the peak months of the year and the Sep rentals were up. The high occupancy rate in our rentals was making it difficult to show condos for sale and we seemed to have more lookers than serious buyers. We expected we would see additional serious buyers this fall but so far that is not the case. Again “unpredictable” is the catch word. The low inventory has made the options fewer and may result in an increase in the average sale price if we get the buyers in this last quarter. In summary: In 2010 the low end price point was the leading sales segment with 78% of total sales sold below $350K and that has been mostly true again in 2011. The high demand for the lower end, below $350K properties, was mostly from short sales and bank owned units. There are few units still available in this segment remaining in inventory. We have seen a wider spread in sales prices in 2011 and higher end buyers are in the market. Two thirds of sales this year are for cash. The “elite” condos in the segment of $600K+ properties continue to be bargains with the price points getting in the $600-$800K range resulting in 28 sales so far this year. There is a paradigm shift in 2011 with the mid-level prices points ($350K-$600K) selling 43 units as these customers came back to the market. This group, the married couples, strong wage earners with an SUV and 2-3 kids in the back seat, are buying these bargains with low price per square foot. Financing will be the factor for these buyers. It’s available but typically with 30% down. The prediction for this year despite the noticeable pause in summer sales numbers is 179 total sales and a rise in price points by 3% at year’s end. All of this is to say:

There is a still opportunity for Buyers in this Market We have little inventory still available for the bargain hunter. There are some off- beach, and a few deals in the Gulf front, mostly in the $400K-$500K three bedroom condos and $200-$300K two bedroom condos. Values can still be had in larger, so-called larger elite condos. See the data from the Multiple Listing Service data banks on page two. It will allow us to consistently compare “apples to apples”. (Tax records can distort our analysis and lag in time.)

Peter C. King Tel: 850-261-3938 pking@resortquest.com www.perdidopete.com

Year’s Sales Avg ListPrice Avg Sale Price % Diff Sell/list Avg DOM End Inventory

2006 161 $758,821 $728,872 96.05% 107 496

2007 96 $675,004 $618,268 91.59% 245 420

2008 108 $658,023 $601,276 91.38% 292 346

2009 161 $422,062 $382,526 90.63 203 265

2010 153 $327,353 $303,498 92.71% 159 215

2011 Sales Avg List Price Avg Sale Price % Diff Sell/list

Avg DOM

Curr Inventory

Jan 14 $340,592 $324,976 95.41%165 204

Feb 14 $398,053 $348,992 87.67%262 214

Mar 22 $393,018 $344,312 88.94%279 201

Apr 17 $345,770 $323,158 91.83%201 210

May 15 $415,028 $371,357 89.47%224 210

Jun 17 $391,586 $354,070 90.41%145 206

Jul 15 $340,783 $316,636 92.91%345 216

Aug 29 $648,157 $586,338 90.46%311 200

Sep 10 $413,920 $378,450 91.43%107 211