Panama City's housing is a mix of older, established neighborhoods and newer infill, shaped by the bay and the city's history of consolidation. Near the waterfront, Historic St. Andrews holds older Florida cottages, bungalows, and some elevated newer homes; Millville has a working-waterfront stock of modest, mid-century houses; and the downtown north neighborhoods mix early- and mid-century single-family homes with apartments. Lots are generally smaller in the older core and larger farther from the bay. The area draws a broad base of buyers, from military families tied to Tyndall and Naval Support Activity to long-time residents and Gulf Coast newcomers.

Panama City's four principal districts — St. Andrews, Historic Downtown, Downtown North, and Millville — each carry a distinct character. St. Andrews, the oldest, wraps around a waterfront of marinas, seafood houses, and historic cottages along St. Andrews Bay. Millville, settled as a lumber and shipbuilding center in the late 1800s, retains an older working-waterfront identity. The downtown and its northern neighborhoods form the civic and commercial heart, with government buildings, shops, and a grid of mid-century homes. Glenwood, another established area, has been part of recent neighborhood-planning efforts to guide infill and resilience.

Panama City offers a coastal, working-town lifestyle distinct from the vacation atmosphere of Panama City Beach. Water is central: boating, fishing, and sailing on St. Andrews Bay, seafood restaurants and marinas in St. Andrews, and quick access to the Gulf. The military and port workforce gives the city a practical, community-rooted character, with festivals, farmers markets, and events along the downtown waterfront. The arts scene, historic districts, and local food culture have grown around the bay. Residents enjoy a subtropical climate, mild winters, and easy trips to the white-sand beaches, while Tyndall and the port anchor long-term employment.

Panama City is served by Bay District Schools, headquartered in the city, which operates roughly four dozen schools across Bay County and is among the larger districts in the state. The district covers the county's public K–12 education except for Mexico Beach, which is served by Gulf County. Families also have access to charter, private, and parochial schools in the Panama City area, as well as Gulf Coast State College and a Florida State University Panama City campus for higher education.

Panama City sits on U.S. Route 98, the Panhandle's principal east-west corridor, which links the city to Panama City Beach, Mexico Beach, and points along the Gulf Coast. U.S. Route 231 provides a north-south connection into Alabama and the interior. Northwest Florida Beaches International Airport serves the region with commercial flights. The Port of Panama City, a deep-water seaport on the bay, handles bulk and breakbulk cargo and is the nearest seaport to Tyndall Air Force Base. Commuting is largely by car, with the bay and its bridges organizing local travel.

St. Andrews State Park, minutes from the city on the bay's edge, is the signature recreation asset, with sugar-white sand, emerald-green water, swimming, snorkeling, fishing, and camping where St. Andrews Bay meets the Gulf. Shell Island, accessible by boat, offers an undeveloped barrier-island beach. On the bay itself, boating, sailing, kayaking, and inshore fishing are year-round pursuits, supported by marinas in St. Andrews and Millville. City parks, trails, and ballfields serve neighborhoods, and the larger Gulf beaches and state forests of the Panhandle are a short drive away.