Last week we reported showings and phone calls were down for a few weeks after Easter according to several agents we spoke with, but that all changed about a day after writing the story.  Phone calls and offers picked up significantly last weekend, so it’s very hard to judge the market on a daily basis.                   

This week we decided to step back and analyze April 2010 vs March 2010.  Official numbers won’t be released until next week, however we believe we’ll see a year over year increase in home sales about 9-10%, and we believe prices will up again over last year as well. 

SW Florida Real Estate Home Sales Lee County Florida
Single Family Home Sales in SW Florida March-April 2010

We’ve created a graph illustrating sales numbers for March-April of 2010.  Sales for single family homes increased ever so slightly over March.  We then wanted to know the mix of foreclosed homes and short sales.  Foreclosure sales actually fell 10.43%, while short sales rose 12.96%.  This coincides with our predictions back in March that we may see a rise in short sales as bank gear up to handle more short sales. 

Foreclosure filings have been down, so 6 to 12 months in the future it’s reasonable to assume there may be less foreclosure properties for sale, especially if banks continue to increase their short sale efforts. 

Our numbers are close to but not identical to official numbers that will be released next week for one reason.  We use data from multiple MLS’, but there is the potential for some listing overlap if a property is listed in more than one MLS.  Statistically that runs about 5% give or take.  We’d rather have a little overlap than miss a lot of listings and sales. 

Condo sales were up in April over March, and that would be expected as condo sales tend to build throughout the season and culminate in April.  Condo sales are increasingly difficult to finance with new regulations on approving not only the borrower, but also the association itself.  Many March closings were pushed back to April, and we suspect many April closings may get pushed back to May, so May could be a good month due to high sales and delayed closings, both in the condo and single family markets. 

Headlines next week should read home sales up somewhere around 10% +/- depending on what the official figures are, and home prices up as well.  Last year’s April median home price dipped to $85,500.  March 2010 median figures shot up to $95,100 up from $88,000, so even if prices hold steady from March we should be reading about price increases. 

Next weekend is Memorial Day weekend, so sales activity will drop-off as people plan their time off.  It will be interesting to note people’s perceptions of Florida and their willingness to book vacations here in advance due to the oil crisis in the Gulf.  Many visitors come back in the summer and buy.  Additionally, the Euro is now worth less, so it will be interesting to see if that affects foreign visitors this summer with less buying power.  Hopefully once we sort out the Gulf oil spill, our Chambers of Commerce will promote the area as a great place to visit.  We count on many of these visitors to buy property in Florida each year, so we do want them to visit and spend money in Florida and help our economy. 

In the meantime, let’s enjoy some positive publicity next week.  Our market is due for positive news, and it helps buyers to understand that prices are rising and inventory is shrinking little by little, and the time is now to step up if they want in on today’s bargains.

Seems like the topic of the day is what’s up with the oil slick and how will it affect us?  The answer is it could affect us in three ways:  Environmentally, Economically, and Politically. 

We’ll leave the political arguments to the experts on TV.  Environmentally people realize how it could affect beaches, sensitive estuaries, fish, and the like.  Economically this could have a ripple effect on boat captains, restaurants, tourism, and ultimately real estate. 

Oil Spills Effect on Florida Real Estate
Gulf Coast Oil Spill's Effect on Real Estate in Florida

We should not put our heads in the sand and pretend like it doesn’t exist, but I think too many people are suffering from FEAR (False Expectations Appearing Real)  Many times the potential of what could be is far worse than anything that actually happens. 

Here are a few real estate examples.  I remember on two occasions a church was proposed that backed up to a subdivision.  All sales stopped for homes that backed up to the potential church.  Potential buyers looked at a future church as a commercial albatross or something and were afraid to buy for FEAR values would go down after they buy it. 

In both of these subdivisions where the church went in, sales resumed immediately after buyers saw what was.  They feared what could be and shutoff, but once erected they could deal with what was.  

Remember back to Hurricane Charley in 2004?  Charley put SW Florida on the map, and many feared the bad publicity about hurricanes would mean nobody would buy here again.  I guess the old saying “There’s no such thing as bad publicity” is true, because people flocked here in droves looking for property in 2004.  In 2005 it seemed we had a hurricane every weekend somewhere in the vicinity, and it didn’t stop people from buying.  What ultimately doomed SW Florida real estate in 2005 wasn’t hurricane related at all, it was a man-made financial crisis.  The whole point I’m trying to illustrate is that what people feared didn’t hurt us at all, and in fact even the bad publicity seemed to help.  It drew attention to our area. 

The jury is still out on what will happen with the oil.  After a slow start, it appears that the government along with BP is pulling out all stops to break it up.  There’s a chance the oil could go some places and not others.  I am certain that local Chamber of Commerce departments are gearing up ad campaigns depending on what happens.  If the oil doesn’t come here, you could just imagine all the tourists who were supposed to visit Biloxi MS, Destin, etc. coming here instead.  And this scenario could play out up and down the coast depending on the oil. 

If the oil does come here, we know the government will employ a massive cleanup effort and things will look fine.  I worry more about the wildlife and the unseen effects more than waterfront prices and real estate.  I think our real estate will be just fine.  What may not be fine are businesses that rely on fishing and tourism in the short term. 

It is for this reason we must all join together and do whatever we can like they are doing now in Louisiana.  Let’s do what we can to protect our environment, our beaches, our seafood, and our way of life.  The more we do for our environment, the less effect it will have economically and politically.  Let’s turn this disaster into something positive.  Let’s increase regulations and add protections to minimize this happening again.  Too many people and wildlife depend on a clean environment. 

Real estate will be just fine.  If the oil comes, FEAR may affect us in the short term, but real estate will recover.  Let’s hope the same can be said for our environment and people who depend on clean waters.