Can I Tell You A Secret? – Good news for Florida Real Estate
According to the Florida Association of Realtors, September existing home sales in Florida rose 34 percent over the same month in 2008. This equates to a total of 14,419 homes sold statewide compared to 10,778 homes sold in September 2008. Additionally, sales of existing homes in Florida were up in September 2009, 4.1 percent over August 2009.
The median sales price for existing homes in September 2009 was $142,000 versus the median sales price of $174,900 in September 2008. This reflects a decrease of nearly 19 percent over last year compared to the national average of a 12.1 percent decrease.
This is good news for the Real Estate market here in Florida and it does look like we are going in the right direction. It is my opinion that there are several dynamics causing this to occur.
First, there is an increase in first time home buyers as reported by the Florida Association of Realtors, and from my own personal experience. These first time home buyers are working frantically to get their purchase closed prior to the deadline for the Federal First Time Homebuyer Tax Credit. We are seeing the “crunch” time effect right now especially at the lending level, with closing dates being switched due to the “overwhelming amount of mortgages being written this month”.
There is also a back log in most county court systems on foreclosures. As these get approved in waves and get listed, cleaned and shown, they are being sold. We are seeing these properties purchased quickly by both investors and first time home buyers as they come on the market which has kept the foreclosures at a relatively consistent number.
Another key element to look at is short sale approvals from the bank. Although I have not made calls yet to my key contacts at the banks, I think that many of the banks are approving more deals than before in a more efficient manner.
Then we have “traditional” existing home sales, which do not include short sales or foreclosures. These are homeowners who are selling for a plethora of different reasons, but the property is not in distress. These are starting to be sold now because they are being priced in accordance to current market conditions. Five months ago, I reviewed 100 traditional existing home listings. Out of these 100, using a comparable market analysis (CMA), I found that 81 were priced 12 percent higher than what I would have recommended for the current market conditions. Last week I reviewed an additional 100 traditional existing home listings and found that this number is now only 23 priced 12 percent higher than the CMA and what I would have recommended, based on the current market. The unique thing about this little experiment is that I found that 14 of the 81 homes from the review five months ago were still on the market, took price reductions, and were still over priced to the market. These 14 were not included in the second batch of properties I reviewed.
So some good news for the Florida Real Estate market for September 2009, as we continue the dissolve the distressed properties through sales, the median home prices will continue to stabilize.
REALTOR, CSP
Leisure American Realty