Robin Sherman, CRS, Broker Associate Robin@PensacolaForYou.com

Sales and Currently Active Listings of Single Family Homes, Towwnhomes and Condominiums in Escambia and Santa Rosa Counties for 2008. Source: Pensacola Association of Realtors.

What's going on with the Escambia and Santa Rosa economy and local housing market? Here's the latest from a presentation I attended at the Pensacola Association of Realtors yesterday by experts Dr. Rick Harper, Hass Center for Business Research and Economic Development, Al Muller, Metro Market Trends and local appraiser John Priller:

John Priller- Pensacola area appraisers have just received new, tighter HUD guidelines pertaining to the required number of comparable listings and sales in the last 3, 6, and 9 month periods as well as absorption times. Translation: appraisers have more work to do and we should be looking for fees for appraisals to go up.

John notes that we have watched housing prices in the Greater Pensacola Bay Area fall at a rate of about 1% per month for more than a year and these rates must be taken into account when performing appraisals.

He predicts that we are closer to the bottom for our high end residential properties, but our lower priced properties will continue to fall. He believes we will see our housing prices fall through 2009. Once we reach the bottom of the market we will have a period of "stagnation" before prices begin to rise again.

Dr. Rick Harper- Dr. Harper echos John Priller's predictions. He said that while he had predicted a bottom of the Pensacola Bay Area housing market in late 2009, he is now changing that prediction to early 2010 based on the latest economic news.

While we can consider 6 months of housing inventory (The time it would take to sell all the active listings in the market if no new listings came on.) healthy, we now have 17 months of housing inventory.

Dr Harper pointed to population growth as the driver for the housing industry and said that immigration reform is key for states like Florida who have historically relied on in migration for new growth. While our Pensacola area housing slowdown began prior to the poor nationwide economic news, the slowing economy has certainly hampered any recovery.

Dr. Harper predicts that our commercial sector will continue to soften as "retail follows rooftops."'

There are a few bright spots in the local economy. Our small corner of Florida has always had a more affordable housing market than the rest of the state and our "run up" while significant, was not as extreme as most of the rest of the state. We are also somewhat insulated economically with our military installations. We have seen oil prices and inflation decrease and our trade deficit shrink. Fort Walton Beach will see an estimated 6,000 new jobs created in defense with the BRAC (Base Realignment And Closure) recommendations. Harper predicts that historically low interest rates - as low as 4 to 4.5% - will certainly stimulate housing sales.

Al Muller - Al said that while our prices increased rapidly from 2002 to 2006, the downward trend has been slower. He anticipates this to continue as there is a "Great Hidden Inventory" which is made up of the homes that were on the market but were pulled off when they failed to sell and homes that would have gone on the market if prices had appreciated.

Like John Priller, he anticipates a slow return to appreciation. Al's research is in line with Dr. Harpers as well and he sees declining housing prices for Escambia and Santa Rosa Counties over the next year.

Bottom Line - All the experts agreed that with prices and interest rates low and an ample supply of housing inventory there is a fabulous window of opportunity for purchasing a home over the next year.

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As we enter the New Year I have been thinking a lot about financial planning and happiness. Funny how intertwined the two tend to be!

While many of us are rethinking our spending habits amidst the poor economic news and wondering if we really NEED all those things we tend to buy, the fact of the matter is that even if we simplify and downsize there are some financial realities that we just can't escape.

And for women these financial realities can be much different than those faced by our male counterparts. I listened to a great talk by Carol Carlan, a consultant with "Our Collective Mind" at the Pensacola area Women's Council of Realtors yesterday. Some points she made deserve to be shared:

• U.S. Life Expectancy - for Women 83, Men 76
• 3 out of 4 Married Women will be Widowed
• 3 Common Mistakes Women Make 1) Don't Invest in a 401k 2) Don't Diversify and Take Risks in Investing 3) Underestimate Health Care Costs
• Carol's talk reminded me of a recent study which was conducted by the Harvard Generations Policy Program. The findings indicated that while the approximately 40 million baby boomer women are the largest generation to reach their 40s, their financial security may not be assured unless they make wise housing choices.

The study showed that boomer women (born from 1946 to 1964) spend more, acquire more debt, and are less likely to have traditional pensions, spousal benefits or retiree health coverage than other cohort groups. For these women - interestingly enough, the majority of those I saw sitting around me at the Pensacola Women's Council of Realtors group - housing is a key to their future security and happiness.

The Harvard study says unequivocally that women of the baby boom generation who own their own homes (either alone or with a spouse) will be at an economic advantage.

Over the past two years I have watched our hot housing market cool, our economy slow down and potential buyers wring their hands as they worried over finding the bottom of the local housing market. Both Carol Carlan's talk and my review of the Harvard study reminded me just how important it is to review with potential buyers the decision tree for renting vs. buying. Long term financial goals and security always have to be part of the equation and in most cases, buying wins out.

As we enter a new year and take stock of where we are and where we are going, whether we are female boomers or not, housing should be a big part of our equation. With the current attractive housing prices in the Pensacola area, low interest rates and the generous seller concessions we are seeing, NOW is a great time to explore whether buying is right for you. If you agree, don't wait . . . call your professional Realtor!

The chart above provides an overview of the Escambia and Santa Rosa County single family home, condominium and townhome sales from 2006 to 2008. You will note that sale prices are down while selling days on the market have increased significantly. Firgures were taken from the Pensacola Association of Realtors Multiple Listing Service.

Robin Sherman, Robin@PensacolaForYou.com

The National Association of Realtors (NAR) is working hard to get the word out - Mortgage Money is Available!

In a press release issued today NAR urged the public to disregard much of the "misinformation" floating around in the media and on blogs related to the tight home mortgage market. NAR shares the following facts:

1) An individual may be required to put down 20% based on that person's financial situation, but that is not an across-the-board requirement for all borrowers.

2) A borrower who puts down less than 20% is required to obtain mortgage insurance.

3) Even in a declining market a borrower is required to make at least a 5 or 10 percent down payment.

4) FHA requires a 3.5% down payment by borrowers, so long as they meet a 31% housing cost-to-income ratio. In other words, anyone who stays within their budget and who can afford a 3.5% down payment (even with family help) can become a homeowner.

It is quick and simple to determine your required down payment. A call to a reputable lender and a few minutes of your time will provide you with the information you need. I know that many people are afraid of having their credit pulled, having heard that this will impact their credit score, but it isn't necessary to have your credit pulled to get an idea of your downpayment requirements and an estimate of loan costs and monthly payment schedules. Again, any reputable lender will be able to help provide this information.

We will be happy to provide you with lender information for the Northwest Florida real estate market. Our primary market area is from Fort Walton Beach through Pensacola, Escambia, Santa Rosa and Okaloosa counties.

Unemployment, slow retail sales, falling home prices, and here we all go . . . circling the drain once again. Amid all this negative news isn't there a bright spot for Pensacola? Well, of course there is - or are- in reality (and realty) there are MANY positive things going on in Escambia and Santa Rosa counties:

#1 - Falling mortgage interest rates - We actually saw rates hit 4.5% in Pensacola in mid December and many predict we will see rates this low once again. Those of us working in real estate and related fields saw a rash of activity in December as buyers scrambled to take advantage of the low rates and attractive home prices.

#2 - South Santa Rosa County - Surveying is underway on the 100-plus acres owned by Pensacola Junior College in Gulf Breeze (Midway) for construction of a new campus within the next two years.

#3 - Escambia County - Several large capital projects are underway - or in the final planning stages. Today's Pensacola News Journal ran a story "Building Up 2009"detailing the following projects; the $320 million wastewater treatment plant, the $35 million airport expansion and completion of the adjacent $16 million parking garage, Navy Federal Credit Union's $54 million building 3 on their Beulah campus and the much anticipated $70 million Community Maritime Park.

#4 - Regionally - There is still the strong likelihood that the $40 billion KC-45 tanker project will find a home in nearby Mobile, AL, and the Chamber's economic development arm continues to promote the I-10 Wired initiative that I wrote about in an earlier post.

So let's pay heed to the difficult issues our economy faces, but let's also not lose sight of the great things on our horizon and how they will impact our local economy today and well into the future.

There was a great article in last Sunday's Pensacola News Journal titled "Meltdown to Rebound - When will area economy turn around?" The News Journal brought together a panel of five Pensacola area economic experts for their read on what our future will bring.

One of the experts interviewed for the Pensacola News Journal story, Al Muller from Metro Market Trends was featured in a blog I wrote back in July on the same subject - Real Estate Trends, What's the Real Real Estate Story

Interestingly, several members of the panel - including Al - pointed out that the "rapidity of the economy's meltdown" was the most surprising thing about it. Indeed, when I heard Al's presentation back in July he was encouraged by some bright spots in the housing market which, although small, were pointing to a slowdown in the rate of decline. But that was before Wall Street's credit crash hit the news.

Muller had predicted that we might see the Greater Pensacola Bay area (Pensacola, Milton, Gulf Breeze, Pace, Escambia and Santa Rosa Counties) housing market start to get back on track to our traditional 4.5 to 5% annual appreciation rate by late '09 or early 2010. According to his comments in the Pensacola News Journal article he feels it will now take a major catalyst like federal tax incentives coupled with attractive interest rates to kickstart the local housing market. "Bottom line," Muller said, "as long as we're in a recession the real estate market won't get better."

So, what does this mean for the average person looking to buy or sell real estate in the Greater Pensacola Bay Area?

Number 1 - For Buyers - Today is a great day to buy! Certainly credit is tight and a good credit score is important. However, the current interest rates are incredibly attractive and there are some great loan products and incentives - particularly for first time home buyers - in the market now. Let's hope congress is listening to people like Al Muller and we see some significant tax incentives for home buyers in the new year. Who wouldn't be excited about a 20% tax credit for buying a home? Write your representatives!

Number 1 - For Sellers - Listen to a professional real estate agent and PRICE YOUR HOUSE FOR THE MARKET. Many of today's potential sellers took advantage of the appreciating home prices from 2003 to 2006 and took out equity loans on their homes. As prices have declined this has made it difficult to sell as they are essentially "upside down" in their home.

The reality is that homes must appraise for buyers to obtain the loans to purchase them. As a seller, analyze what you really need out of your home sale to make it work for you. In 2008 I had a seller who had to transfer with his job and was in this "upside down" situation. Once we looked at the cost savings he had for housing in his new home town things didn't look quite so bleak. We priced his home below the neighborhood comparables and sold it quickly. Yes, he came to closing with cash - never fun as a seller - but he purchased on the other end of his move for much less than he had anticipated and got a very favorable interest rate which allowed him to actually buy more house than he had expected.

Stay tuned to my blog as I will continue to provide updates on local housing information. As always, I will be happy to answer any real estate questions you might have. If I don't have the answers, I will be happy to track down an expert who does!