Is Sarasota Bucking The National Trend?

Below are the sales statistics released on 9/25 by the Sarasota Board of Realtors. Folks need to remember that August AND September are traditionally the slowest months here for Real Estate, as they are for the tourism industry which a lot of our transactions rely upon. We're not like the states up north whose real estate market has to "make hay while the sun shines" in June July August. Our season for real estate STARTS in October and stretches to about May or early June.... I will post these stats here on the blog each month as they become available... Mike W.

Sept. 25, 2007

*The following press release was sent to local media on Sept. 25 at 11 a.m.* Sarasota market continues to stabilize after boom years

The Sarasota-Bradenton MSA, only three other MSAs in the state experienced better August 2007 to August 2006 comparative numbers for single family home sales, and only three reported better numbers for comparative condo sales.

"I am still convinced that we have weathered this adjustment period in sales volume and prices very well, particularly compared to the rest of the state," said Joe Hembree, 2007 SAR President. "We continue to go through a period of adjustment in the Sarasota market, and there has been some depreciation in both the number of sales and the median price. But we are emerging from the downturn faster and stronger than other markets in the state and nation, and I see no reason to believe we will not continue to see growing strength."

With an eye toward the bigger picture, and discounting the historically abnormal years of 2003-2005, we have seen a return to the normal market experienced as recently as 2001 and 2002, Hembree noted.

Dr. Lawrence Yun, Senior Economist with the National Association of Realtors® indicated in an address at Lakewood Ranch Golf & Country Club on Sept. 14 that he believes there has been a negative spate of news concerning foreclosures, hurricanes, property taxes and insurance increases. This has left potential home buyers with the impression that the bottom of the real estate cycle has not been hit, which he believes is an untrue analysis. In fact, the quarterly figures compiled by FAR and NAR indicate that prices in the local market appear to have bottomed out in the fourth quarter of 2006, and have risen since that time.

"They have jobs, their income is rising, but they are saying, 'I'm going to step back,'" Yun said of the potential home buyers.

But Yun noted July's median price of houses sold in the Sarasota-Bradenton MSA was roughly $277,000, a bargain for the beaches, sunshine, golf, fishing and general location that the region offers. Yun said this means real estate agents need to tell the true story of Florida.

Regarding the hurricane scare, only six Category 3 or greater storms landed on Florida's mainland from 1950 to 2003, although eight touched down between 2004 and 2005. "The chances of that happening again are low," Yun said of the disastrous two-year period.

Yun predicted the Florida housing market will recover from the current malaise, get stronger in 2008 and will be booming again by 2010, once people again realize that Florida's assets are unique.

Home and condominium sales declined in August 2007 to a total of 430 sales, as local families began to settle into the school year and plan ahead for the holidays. However, this figure is still 21.1 percent higher than the low point in the recent local market, reached in December 2006, when only 355 sales closed.

Sales have escalated since then, and have remained stronger throughout 2007." -END

A hidden treasure that is not so hidden anymore:

For the first time in more than four years, the Federal Reserve has made it cheaper to borrow, and by an unexpectedly big margin. See article: www.bankrate.com/brm/news/fed/main-Sept2007.asp

I guess it took a near meltdown of the housing market and a real meltdown in the mortgage business for the Fed to FINALLY stop raising rates or holding them steady. All this fear on the Fed's part of inflation which might be fueled by things like rising fuel prices OUGHT to be offset by the decrease in home values, purchase price and the decrease in consumer confidence as folks in most of the US no longer feel "house rich".

Do read through the Bankrate article as it explains that not every decrease in the fed rate maps dollar for dollar back to lower mortgage rates but I predict this one is going to and pretty quickly - the whole industry - housing AND banking - needs the jump start.

By the way - if you're sitting on the fence about BUYING or REFINANCING. Get off the fence. If the economy shows ANY inflationary signs - look out - these low rates could go away quickly. In an interview promoting his new book Alan Greenspan's crystal ball outlooks much HIGHER interest rates going forward. So get out of that ugly ARM loan now and/or take the plunge on some of the real bargains out there right now.   Ann and I are blown away at what you can buy here now  - particularly on the water...

MORTGAGE RATES

Rates on 30-year mortgages dropped this week to the lowest point in four months – an average of 6.31 percent for FRMs – providing some relief for people hoping to refinance or buy a new home.

Read the full story:
http://www.floridarealtors.org/NewsAndEvents/n1-091407.cfm

Stating the obvious, low mortgage rates allow people to afford more home. Also in this time of lots of people being stuck in those many times nasty "Option Arms" here's a chance to get out and refinance at low rates.  Those Option payment ARMS were an OK (note I didn't say a GOOD idea just an OK idea) when homes were surely appreciating. But now with the market not only flat but in many cases falling they can be downright dangerous. When you decide to send the smallest payment option in any given month you just know that that payment doesn't cover your principle, interest, taxes and insurance. That means that when it doesn't the additional interest you didn't pay but should of still accrues - and your unpaid balance is going UP (that's called Negative Amortization!). Even while the market price of the house might be going DOWN.  So take the news that interest rates are falling and if you don't have some awful prepayment penalty (and if you DO have an awful prepayment penalty you should be wary of the persons who put you IN that product in the first place!) - look at refinancing now to a lower FIXED (see that word in CAPS - that's FIXED) rate.  - Mike W

This is the very first entry in what we hope will become a useful forum to share ideas about the ever changing Real Estate Market here in the Sarasota and Suncoast area.  We want to try to help make some sense out of all the news we are all faced with and provide some education as well on newly important issues.  For example we'll take some time here in the next few days to explain what a "short sale" is and give you perspective on who this works for and how to use it if you had to.

But most importantly let's let this be a place where sanity rules - not sensationalism. I saw a great sign in front of a local real estate office in Englewood Florida that says "Doom and Gloom Sells Newspapers, We Sell Real Estate!"

I like that. Certainly Ann and I make our living selling Real Estate. But our clients live, buy and sell here and it's our intention to always provide reality as we know it, in a way that can benefit us all. We live here, we love it here, we're not going anywhere and we are the biggest cheerleaders for all the great reasons to live here. Real Estate is like any investment with it's ups and downs - but UNLIKE any other investment - we all LIVE in this investment!

Lastly - please feel free to ask anything real estate wise and just simply about the experience of living in this great place.  Let's be kind to one another with our postings and civil and let's have a great time!

I hope we're having vibrant discussions and providing you with great information for many years to come.