2022 was a unique year for real estate in Panama City Beach and for Palmetto Trace. Our subdivision (yes, I live here!) has seen a lot over the last twenty years. The St. Joe Company started this neighborhood in 2002. With underground utilities, sidewalks, and pools, this planned neighborhood was prime compared to what was available at the time. There were four phases to complete the neighborhood with the last phase being carried out by David Weekly Homes in 2009.
I purchased my residence here in 2005 on Bainbridge Street as part of Phase 3. As many remember, the ‘bubble’ was about to pop in 2005 – and like many, I became a victim of it. A couple of years after my purchase, I thought that I had overpaid for my home; then, I believed that I ended up with the short end of the stick. But time plays in real estate’s favor. The longer you own real estate, the more equity you gain. Not simply by paying off your mortgage; not just because real estate is known to be a safe long-term investment vessel; but also because there is another hidden, yet powerful, component: inflation! Inflation is viewed by many as a problem, an enemy, a sort of cancer. We shall look at inflation differently, and welcome ‘monetary erosion’ as our ally and friend.
Cumulative inflation over many years has important consequences. One dollar in 2003 had the same purchasing power as $1.66 today. Einstein once said that the strongest force in the entire universe is compounding. The graphs and tables below underscore this reality. My home can serve as a good illustration: I purchased it in 2005. Inflation alone has given it a ‘value boost’ of 52.4%! If you acquired your home 20 years ago, in 2002, your ‘value boost’, or cumulative inflation rate has been 65.5%.
Placing real dollar numbers to this inflation rate, if you bought a home in Palmetto Trace for the average sale price of $163,000 in 2002; today’s value, factoring inflation alone, should be $270,000. It is noteworthy that, had you kept the $163,000 in cash at home, you would still have $163,000 – not one penny more. The first conclusion is that your investment in Palmetto Trace shielded you against inflation. But this is not all, the average sales price in Palmetto Trace in 2022 was $490,000. Beyond protecting you against inflation, your property will have yielded you a whopping 300% return! Would you have done better elsewhere?
For a more detailed look at how your Palmetto Trace investment has performed, look again at the graphs: Graph 2 shows the average home sale price each year for single detached homes. They range from $163,000in 2002 to $490,000 in 2022. See how your purchase price compared… and where you stand today.
The data used in this document was extracted from reports I created from the Central Panhandle Association of Realtors. The information is specific to Palmetto Trace. We are a unique neighborhood… This is why these numbers are unique.
If you look up the national average for home value increases over the last couple decades, you will find that results are comprised between 50 – 100%. Our 300% underscores how unique Palmetto Trace is!