Velocity sales in real estate is picking up and has had an increasing trend over the last several months; 8 months statewide, to be exact. Prices are still coming down, or showing signs of doing so, but more people are buying. Evidence is clear that people, in general, are more comfortable with the fact that the real estate market is in the toilet, and, in fact, the market isn’t really regarded as being in the “toilet” any longer, but rather just a strong “buyer’s-market”. Deals abound everywhere and sellers, now more than ever, are willing to negotiate on just about everything to hold onto the possibility of selling their property.
So, if you want to miss out on what Trump and Buffet are saying is one of the most lucrative buyer’s markets ever, STOP BUYING REAL ESTATE.
Statewide, and even nationwide trends reflect a positive upward trend in sales velocity, but locally, prices are still coming down, and velocity sales are about the same as last year. However, the overall “feeling” of the market has changed. Talking to a recent real estate purchaser, “I can’t say whether we’re at the bottom or not, but prices are lower than they have been in years, and the price is right for us to purchase and it be worth it to us.” “We’re not looking for a quick turnaround, but we are looking for something that we can use and rent out. . . we’re paying cash, so this is a good place to park money for the next several years,” said another recent real estate buyer.
Although the real estate market in Panama City Beach is proving to be a strong opportunity to buy condos, homes and other real estate with great deals coming on the market almost daily, local trends are not quite the same as the statewide and national trends. “We’re still not seeing any signs of price stabilization,” said a local agent.
In May 2008, 41 existing single family homes sold in Panama City Beach averaging $276,000 or $151 per square foot. In May 2009, 34 existing single family homes sold averaging $226,000 or $116 per square foot – that’s 17% fewer homes sold at 18% less than May 2008. Statewide, velocity sales has increased by a small amount monthly for the last 8 months.
In May 2008, 47 existing condos sold in Panama City Beach averaging $226,000 or $213 per square foot. In May 2009, 45 existing condos sold averaging $199,000 or $181 per square foot – that’s 4% few condos sold at 12% less than May 2008.
Statewide existing home sales rose 18 percent during the month of April with a total of 13,111 homes sold compared to 11,133 homes sold in April 2008, according to FAR. April’s statewide existing home sales were slightly higher than statewide activity in March.
The national median sales price for existing single-family homes in March 2009 was $174,900, down 11.5 percent from a year earlier, according to NAR. In California, the statewide median resales price was $253,040 in March; in Massachusetts, it was $255,000; in Maryland, it was $264,302; and in New York, it was $222,500.
In Florida’s year-to-year comparison for condos, 4,660 units sold statewide compared to 3,862 units in April 2008 for a 21 percent increase. The statewide existing condo median sales price last month was $106,600; in April 2008 it was $178,900 for a 40 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $177,600 in March 2009.
Talking with Jim Free of Jim Free Realty, “There are a lot of cash buyers right now, financing isn’t very easy, but the Florida Association of Realtors is in the process of talking to Fannie Mae about some lending issues that could help.” Many are jumping at this opportunity as interest rates are down, yeilding low returns on investment accounts. The down prices in real estate provide a great place to “park” money and give the buyer something tangible to use. The only quarell is how long will you have to “park” it before you can take it back out with a profit. For those not worried about that, real estate proves to be a great option.
On The Beach Show, the buyers we are working with are mostly looking for fixer-uppers citing that the deals are usually better there and emphasizing a willingness to put a little “elbow-grease” into a purchased property to save money. The Hot Deals that garner the most attention are properties that are super cheap, but require a little work. Some of these homes have been listed as low as $50 per square foot, and proving hte market is hungry for real estate deals like this, most of them are off the market within days of them being made available.
So, if you are a buyer, the story hasn’t changed if you are looking for the best deal out there; you still have to fight for it. If you are a seller, you can sell your property and sell it quick if it is priced super cheap; meaning that the perceived value is significantly lower than other recenly sold properties on the market. If you are an agent, work hard and you’ll be fine. Everyone is looking for that beat up foreclosure that is $50 to $75/foot or that listing where the seller is losing his shirt. Become specialized in finding the right deals for your clients and keep them up to date regularly with a great web site, blog and consistent email notifications. And, follow up, for crying out loud; just because your clients don’t respond, doesn’t mean they aren’t interested, you just haven’t sent them something yet that illicits a response.
Mortgage rates remain at near eight month lows as strong demand in the bond market drove the yield on the ten year Treasury note below 3.20% before rising slightly to 3.25% today on a renewed rally in stocks. The rate on the benchmark thirty-year is hovering right at 5% with no points and the fifteen-year stands at 4.375. Thirty-year rates actually were pushing 6% back in the spring so this is quite an improvement and rather unexpected. The general consensus has been that as the economy pulls out of recession and as signs of economic growth become more evident, rates would rise as inflationary pressures mounted, but this has not materialized.
