In line with the rest of Florida, Panama City home sales declined in March as the state saw significant drops in most housing markets.

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The Bay County housing market made a huge comeback in February, leading the state in percentage of sales over February of last year.

The Florida Realtors Association released February sales figures Friday, and only Panama City showed an increase in the number of single-family existing homes sold in the North Florida housing market.

The local numbers showed sales up 21 percent in Panama City, while Fort Walton Beach was down 27 percent, Pensacola was down by 19 percent and Tallahassee tumbled 20 percent.

Fort Walton Beach was the only Panhandle city with greater losses than the state average.

As far as home prices are concerned for existing property sales, home prices are down 3 percent statewide.

Down 4 percent in Ft. Walton Beach, down 9 percent in Panama City and down 2 percent in Tallahassee.

Maybe the reason Panama City enjoyed more home sales is because buyers got better deals. The median selling price was down about 9 percent from last year, and 6 percent less than the state average.

The existing condominium market in Panama City saw a major jump, percentage wise, although only talking about 20-more units than February 2006. At that time last year, Florida home mortgage rates were higher than right now.

Tallahassee also saw a large percentage jump, while the rest of the region mirrored the declining state average.

Locally, condo prices might have had something to do with the increase. The median selling price for existing condos was down 8 percent from 2006. Experts say cheaper Florida mortgage loans helped spark interest.

They also think housing prices have stabilized and that the outlook for Florida’s single-family residential housing market is brightening, with Florida mortgage costs remaining near historic lows.

In fact, one University of Florida researcher says it doesn’t look like prices are going to fall anymore. However, certain parts of the Sunshine State are very much inflated, so it remains situational.

SOURCE: WJHG-TV

A small city needs two things to jack up housing demand:

1. More people
2. Wealthier people.

Unlike most of the rest of the Sunshine State, Panama City hasn’t really attracted either, mainly because it’s isolated way out on the panhandle in West Florida. It’s even in the Central Time Zone.

Nevertheless, Panama City is poised to host big airliners in its regional airport, as well as a lot more visitors - and a lot more buyers now that Palm Beach County and other such locales have gotten so expensive. In fact, Panama City is #1 on CNN Money’s list of America’s Top 10 Cities to Buy Now.

Take a look at these gaudy stats below. Your Florida mortgage will go a lot farther up north than in traditional hot spots in South Florida - and your home is projected to increase a staggering 72 percent in value between last year and 2011.

Median home price
2006: $223,000
2011: $383,000

Population
2006: 166,000
2011: 187,000

Per capita income
2006: $31,000
2011: $40,200

State and local governments and a top regional developer, St. Joe Co., are planning a new airport by 2008 at a cost of more than $300 million.

Locals expect the facility to open up the North Florida housing market the way Southwest Florida International Airport in Fort Myers helped drive that region’s boom in the 1980s.

“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, and the local market has already absorbed a price correction after peaking last year.

Janet Roan, one of many optimistic real estate agents in Panama City, notes that two-bedroom beachfront condos are 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 state would be advised to consider this move. A Florida home mortgage can still be obtained for cheap, and the entire area is poised to appreciate like mad.

The red flags? Local politicians, notoriously cozy when it comes to local home builders, have green-lighted several master-plan communities for future development. If supply gets out of hand, prices will stall.