We're starting to see stabilization in prices in our area......I guess that means we're at or near the bottom......if only we had a crystal ball. I do think the crystal ball would tell us that until short sales and foreclosures are becoming a thing of the past, instead of a major part of the present, that we won't see appreciation and we'll probably still see pockets of price drops in areas. While I'll never be able to predict the future, what I can give you are the facts:
Condo Market. The number of condos going under contract in August this year doubled compared to August 2008, showing significant growth in consumer intensity. All totaled, the number of condos going under contract year-to-date this year has exceeded last year by 499 units (up 85%). Condo inventory also continues to decline with supply shrinking a total of 515 units (down 15%) in the past 15 months. While the shrinking supply could eventually cause condo prices to rebound, foreclosures and short sales dominate the market and seem to offset any upward price momentum for now. Short sales and foreclosures accounted for for 44% of all units going under contract in August.
Home Market. Like the condo market, the home market continues to improve. The number of homes going under contract year-to-date this year has increased by 548 homes (up 29%) compared to last year. It is important to note that 2009 is the first of the past four years to show meaningful improvement. Home inventory stayed steady in August, but continues to show overall decline with supply shrinking a total of 805 units (down 20%) in the past 15 months. This spells good news for home sellers who are anxious for a shrinking inventory to begin balancing the market and stabilizing prices. While some stabilization has occurred, short sales and foreclosures continue to offset this gain by applying downward pressure to prices.
Vacant Land. The glory of land prices in past years is a distant memory, and this market continues to lack direction. Improvement isn't likely until builders, who traditionally participate in 80% of all local sales, resume vacant land acquisition. Trying to find a buyer to purchase lots and build is like finding a needle in a haystack. So many of our buyers are from out of town and the hassle of building vs. already completed is taken into account.
Properties ‘Going Under Contract' vs. ‘Closing'. While the number of properties going under contract have taken a dramatic upswing in the past 3 months, actual sales (closed contracts) are not yet showing the same improvement. Nearly half (48%) of all short sales going under contract this year have failed to close. The amount of time required to close a short sale remains about 5+ months; so the final result of the spring-summer buying surge will not be known until September (or after) sales are counted.
Please drop me a note with any questions or comments you may have. I'm always eager to talk about our local real estate market.
HOUSING RECOVERY BY SPRING?
Financial mogul Sam Zell, beleaguered owner of the Tribune Co. that declared Chapter 11 bankruptcy last week, told an Israeli business conference Sunday that the U.S. real estate market will be in recovery by spring 2009. Zell pointed out that the U.S. population is growing, and with fewer than 600,000 building starts in 2008, a million fewer than any of the last 10 years, demand for housing will rise. Zell blamed the current crisis - at least in part - on ill-considered decisions. "We are living through our first Blackberry recession where, literally, information is instantly disseminated around the world and people, in effect, respond to it, perhaps, often without any particular caution or attention," he said.
Source: Reuters News, Ori Lewis (12/14/2008)
Interesting tid bit from Sam - and often I'm asked when the recovery will begin. And many of you hear from me that it's the crystal ball question - no one ever knows where the bottom is, until it's gone. What I can offer you is the information I have on hand.
CONDOS:
The condo sector of our market continues to show improvement. Lower prices and operating costs improve cash flows associated with condominium investment and ownership. These factors continue to foster improvement in the number of condo sales. A combination of lower condo prices, fueled by drops in the cost of ownership (lower interest rates and cash flows) has continued to sustain a steady climb in condo sales this year. The recovery trend remains slow but steady. The number of contracts written in October was up 32% over last year. The under $300,000 market sector seems to be our strongest currently with buyers clustering to get good deals at the beach. There has been an overall downward trend in our inventory levels, but we still remain high with many good deals left to purchase. The deals that I'm seeing my clients get are unreal - I'm so happy for them. Let me know if you would like information - send me specifics of what you're looking for and I'll get the best buys to you.
HOMES:
The home market is holding its own. For example, October ended with 169 homes going under contract compared to 173 in October 2007. The median price of homes going under contract in October was $229,900. An unprecedented 73% of homes sold were listed under the $300,000 sales price. While basic neighborhood home sales flourished, higher-end residences in resort and beach areas decreased significantly. It seems that there are now available ways that people are purchasing homes - such as the Rural Housing program etc. There is light at the end of the tunnel - and many people are grabbing up great deals whether it's for a permanent home - or 2nd home. Let me know if you've had your eye on an area and I can forward the latest to you, and keep you updated.
VACANT LAND:
The land market continues to display the same weakness as it has for 3 years with little sign of recovery. Vacant land inventory exhibits a slight downward trend similar to the local condo and home markets. Although decreasing slightly, inventory is not likely to diminish until professional home builders once again require new land on which to build. In the past, home builders accounted for over 80 percent of all land sales. Builders abandoned the land market around Destin in September 2005, corresponding to the downturn in home sales. If you are interested in picking up a great lot at the beach - or perhaps one to build a future home on - I've got some great deals to forward to you.
MORTGAGE RATES:
I have the opportunity to work with many lenders. Rates change on a daily basis, and right now - THEY ARE GREAT. The rates listed below are as of 12/17/08. I worked an open house with Bonnie Manthey yesterday and she said that Countrywide has the best rates she's seen in a long time. You can contact her at 850-585-3860 if you have questions. 30 Year Fixed Conforming ($417,000 or less) - 4.875 - Purchase or refi, Single Family residence or Condo, Owner Occupied or 2nd Home
30 Year Fixed Non Conforming - 5.875%
Government Fixed 30 - FHA - 5.25%, VA - 5.50%
While most stories seem to be tipped with gloom, there has been a noticeable resurgence of faith in the news stories related to our recovering real estate market. Given the economic news these past few months, the growth in the number of contracts is worth noting. It would have seemed far more likely that economic peril would have driven it downward. Remember - Real Estate will ultimately always be local. Trust a professional, like myself, who will provide you with information to assist you in making an educated decision. Quite frankly, I'm really excited about the future here - for both buyers and sellers. I once again ended 2008 having a great year, and I anticipate 2009 to be even better for my clients. I'm always a phone call or e-mail away.
Happy New Year!!!
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