Not Medical Advice: Yes. According to Shockingfit.com, soft belly fat is one of the signs of weight loss progress.
One theory regarding the appearance of ‘soft’ fat is that when you lose fat deposits quickly from your fat cells, they haven’t had time to get smaller to accommodate, so they fill the extra space with water.
Here's an interesting post from Bodyrecomposition.com:
As folks get very lean, down to the last pounds of fat, the skin and fat cells that are left will often change appearance and texture. It will look dimply (as the fat cells which are supporting the skin shrink and the skin isn’t supported) and feel squishy to the touch. This is bad in that it looks really weird, but it’s good because it means that the fat is going away.
Find out about muscle vs fat at Scientific American.
Do you have too much belly fat? Learn how to lose belly fat with WebMD's tips for a flatter stomach.