Real Estate Authority Blog

As I meet buyers and sellers in my travels around the area, I am faced with these typical questions "Has the market hit bottom yet? "Is this a good time to buy?  "Should I wait to sell when the market improves?"  Here is my take on the local market situation. 

Sales in 2009 were off the charts. Unit sales in 2009 were double what they were in 2008 and 37% above the peak in 2005!  In 2009 over 65% of our sales were from foreclosures or short sales. Unit sales were up dramatically in the 1st quarter of 2010.  There were 5,266 properties sold in the 1st quarter of 2010 compared to 4.379 in the 1st quarter of 2009. 

And we are back to 2001 price levels.  In 2005 the median selling price was $255,000.  That dropped to $145,000 in 2008 and just $85,000 in 2009.  We are seeing a rebound however.  First quarter 2010 median selling prices were $89,000 compared to $87,800 in 2009. So we may have hit the bottom somewhere in the middle of 2009.

I am seeing the better homes sell faster.  When I say better, I mean view, location and property condition, things that are always important in any market. Some buyers are missing opportunities because of unrealistic expectations.  At current price levels many buyers snapping up the best properties at unheard of prices.  So if it looks good to you, it probably looks good to someone else.  Just realize that there are some tremendous bargains out there.  These homes can't be built at today's selling prices so when the supply is gone we are bound to see some upward movement in prices.

If you are a seller I would not wait.  The pipeline of foreclosure property is still strong and I do not see significant price appreciation happening for several years and then some slight appreciation at best.  Our government, lenders and appraisers are not going to let the market go crazy anytime soon.  One thing for sure, the market will change.  Interest rates can't get much lower.  Elections are in the works and all that affects local real estate. 

Given the limitations imposed upon investor purchases, it is clear that end user homebuyers are back in the market.  Homebuyers are looking for the buy of a lifetime ... and getting it.  Despite what you read, banks still are lending .... Even if it courtesy of the federal government. 

So are we out of the woods yet?  Not by a long shot, but the signs are encouraging.  Now the question is "If opportunity knocks, will anyone hear it?"  I think so.  Just ask the thousands of buyers who purchased last month. 

When they were younger my kids would say "Are we there yet?.  My stock answer was "We are almost there". 

It's been a long time coming, but we are almost there. I see light at the end of the tunnel for our southwest Florida real estate market. Despite the the negative economy, our local market has improved each quarter this year and the third quarter was no exception.  Pending sales (homes under contract) in the third quarter were 41% higher than they were in 2006 and 140% higher than last year.  Of course not all pendings close but given normal attrition this year shapes up to be the third best on record.

The most amazing stat is how strong September was. In our area, September is usually the slowest month of the year.  Pending sales in September were 200% above 2007 and 13% above the record setting year of 2005.

So what's the reason for the sales surge? It's no concidence that the fall in the stock market as coincided with the resurgence of our local real estare market. Capital always seeks better and safer investments. Another reason is that homes in the short sale catagory are hitting the markets as bank owned properties, also known as REO (real estate owned) orioertues. REO's accounted for 44% of last month's sales, slightly higher than the 42% private owner sales.  Given the backlog of REO property, it looks like this trend will continue.

Given the limitations imposed upon investor purchases, it is clear that end user homebuyers are back in the market.  Homebuyers are looking for the buy of a lifetime ... and getting it.  Despite what you read, banks still are lending .... even if it courtesy of the federal government. 

So are we out of the woods yet?  Not by a longshot, but the signs are encouraging.  Now the question is "If opportunity knocks, will anyone hear it?"  I think so.  Just ask the thousands of buyers who purchased last month.