Historically summer is the best selling season for single family homes in SW Florida. This is defined by the number of sales that occur in the summer months. Lately we’ve seen a decline in the overall sales numbers, and this is directly attributable to the recovering real estate market and the lack of foreclosed properties on the market.
Of particular note from the official sales numbers that were just released shows a decline in median sales prices down to $127,000 from $132,000 the month prior. The $127,000 price was still 8.45% higher than last year’s number. If you look at the last 4 years of sales prices you’ll notice a gradual trend for decreasing prices starting about May or June. It will be interesting to watch what happens with next month’s report. In each case however numbers either flattened out or rebounded nicely by the end of the year.
2012 is also an election year, and typically in election years people hold off a bit until there is more certainty in the business climate. This year’s presidential election is far from certain. We doubt the election will hold many people back this year simply for the fact that this year is different in that we have a limited supply of homes on the market.
We also think that the median price is being dictated by the supply, not the demand. The demand has been pretty steady. You can’t buy a $50,000 foreclosure if it doesn’t exist, just as you can’t buy a beachfront home for $500,000 if it doesn’t exist. The supply has changed so much over the past few years buyers have been stuck buying what little they can.
Supply has affected the quantity of sales and also the price. We are expecting to see some more foreclosures come to the market as they work their way through the legal system, and the market has proven time and again its appetite is more than healthy.
Interest rates are at historical lows so purchasing power for the buyer has never been greater. Buyers are chomping at the bit to buy anything nice in their price range. As we go to the higher price ranges there is more selection, so sellers cannot overprice.
Banks are just about ready to lift the declining market tag on our market which will help with lending. We almost met the standard last month but a rise in foreclosures coupled with a decline in price spoiled the fun, but if we would happen to get a nice rise next month it might be enough to lift that tag.
If you’ve got a house to sell now may be a good time to look at the market in certain price ranges. If you’re looking to buy a home, you really can’t afford to miss these interest rates. We don’t know how long they’ll last. All we can do is enjoy them while they do. If rates were to double they’d still be ok, but not great. It would knock many buyers out of the market though and drop the price of the home they could afford.
I guess what we’re saying is if rates go up significantly, a buyer will be able to afford a much less desirable home than today. This will affect a buyer significantly. It will also affect sellers, because as rates rise, the buyer pool shrinks like a Shrinky Dink.
In the meantime, we’ll keep an eye on the market with particular attention to upcoming distressed sales, inventory levels, and of course how the Presidential candidates might affect taxation and the overall economy.
Good luck and happy house hunting! If you need real estate assistance please don’t hesitate to call the Ellis Team at RE/MAX Realty Group 239-489-4042