We hear a lot about the economy and what Holiday sales will mean to retailers. Traditionally, Christmas sales are approximately 40% of a retailer’s year, and in some cases even more. Makes you wonder how they stay open the other 11 months of the year.
A lot of people also think Season makes the local real estate market. This may be somewhat true for condo sales, but historically single family home sales are fairly steady, with the 2nd and 3rd quarters usually accumulating the highest sales. Season usually brings a lot of visitors to the area, and of course when they experience our awesome weather in January and February, they dream about buying in the future, so they call and ask to look at homes, many times a few hours before their plane departs for back home.
We think this season is going to be different. Buyers from up North have already started coming down looking to pick up their dream home. They know that Florida is on sale right now, and the chance of getting a 2nd home or retirement home next year or the year after at these prices is slim. Buyers are actually afraid they’re going to miss the bottom, and they know this may be their last season to fully capitalize.
Foreclosures are trending down right now, and median prices are trending up. Home sales set a record in every quarter so far in 2009, and nearly set one in the 4th quarter in 2008. When we say set records, we mean they posted higher sales than even the peak of the market in 2005, only at much more affordable prices.
The national media has reported the low prices we have in Florida, and we’ve seen an influx of buyers from Canada, Europe, and all over the U.S. The first time home buyer tax credit has been a big help to first time home buyers up until this point, and the recently expanded home buyer tax credit for existing owners may help going forward to for sales that close by July 1 and are under contract by April 30, 2010.
Median sales prices currently stand at $91,600, and that is after its 4th straight monthly gain. To put this in perspective, in December of 2005 the median sales price was $322,300. Median prices today are roughly 28% of what they were only 4 short years ago. In other words, median home prices were almost 4 times higher than today. That is a sale no matter what store you’re at.
This sale we’re experiencing has not gone unnoticed by buyers. We’ve gotten some calls recently from sellers who live up North and want to sell because they see stories about property moving again in Florida. They didn’t like the prices last year, so they figure this year must be better. It must be nice to live somewhere else and not have to live what we’ve been going through here locally. They are usually surprised when we tell them what units are going for in the neighborhood. So many will wait to sell next year at higher prices, and they will probably get a higher price next year as buyers soak up all the bargains they can en masse.
I’m not sure prices are going back up to December 2005 levels, but they are slowly going up. We have pent-up demand from buyers and its being unleashed now, at least while the bargains are out. I think we have pent-up supply from sellers who would like to sell but can’t today, and that’s another reason why we don’t see prices quadrupling. This supply will eventually come to the market as prices rise and foreclosure inventory dwindles down the road. The economy will have to make a comeback too, and jobs will be required to complete this cycle.
In the meantime, get ready for a strong home buying season. Agents and title companies will be busy this season. Mortgage originators will be too except many of these sales will be cash. 2009 has been busy already. As you can see, it’s been record setting. We’ve been so busy we’re hiring agents to join our team. People think Season is the only time homes sell in Florida, and as you can tell from the chart, 2nd and 3rd qtrs are generally the prime time for home sales. Season 2010 might change that and make a run at big numbers if the inventory remains there to be sold. The buyers are there.
Here’s to a happy season to all. Buyers, better get your bargains now, because next year they may not be at today’s sale prices.