Market Updates

Housing Shortage on the Horizon?

By | May 23, 2011

Mike Castleman, founder and CEO of Metrostudy, which tracks real-time data of the country’s inventory of new homes, says a housing shortage is looming that will soon will create a huge surge in demand for new homes. As such, now is the time to buy, he says.

In the 41 cities Metrostudy covers, 78,000 houses are either vacant and for sale, or under construction that is less than a quarter of the new homes that fell in that category during the housing boom in 2006 and way below the level of a decade ago.

“If we had anything like normal levels of buying, those houses would sell in 2½ months,” says Castleman. “We’d see an incredible shortage. And that’s where we’re heading.”

The historic drop in new construction mixed with the decline in housing prices is laying the foundation for a dramatic recovery in residential real estate, Castleman told CNN. Castleman expects home owners soon will start returning, which will drive up prices in many markets later this year.

While demand remains low for new construction, he expects that to change. He foresees the recovery following a similar path as previous ones: A severe housing shortage will drive a big increase in demand.

“We’ll get a big surge in demand and the drywall companies will take a long time to ramp up, and it will take years to get new lots approved,” he predicts. “Buyers will show up looking for a house in a subdivision, and all the houses will be sold. The builders will tell them it will take six months to deliver a house.” But they’ll want the house so bad that they’ll “bid the prices up.”

Source: “Real Estate: It’s Time to Buy Again,” CNN (March 28, 2011)

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Real Estate Market Statistics for April

By | May 17, 2011

The Sarasota Board of Realtors reports that a total of 759 property sales were closed in the Sarasota real estate market in April 2011, continuing a strong spring surge that reached the 800 level in March. The recent sales rush has taken the market to the highest levels since the fall of 2005 when sales started to decline. Prices also maintained their highest levels of the year in April 2011 for both single family homes and condos, and the available property inventory dropped to 5,258, a big drop from last month’s level of 5,501, and less than a third of the available properties on the market during the 2004-2006 real estate boom.

Click here to view the complete report and statistical charts:

http://www.sarasotarealtors.com/files/monthlystatistics/SRJune2011stats110517124808.pdf

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Rising Rents Make Rentals Less Appealing

By | April 23, 2011

Apartment bargains once dominated the housing market, but those bargains have slowly faded away. As vacancies decrease and rents rise, renters are finding fewer deals.

Analysts expect vacancies to decrease even more and rents to continue to rise through 2013, as the economy continues to improve.

Rental activity recorded its best start for the year since 1999, according to Reis Inc. Vacancy rates have fallen to mid-2008 levels and rents have increased for the past five quarters, now averaging $991 per month nationwide.

Renters are finding the fewest deals along the coasts, such as New York, Washington, D.C., Boston, Los Angeles, San Francisco, Seattle, and San Jose, Calif. These cities are experiencing low vacancy rates. Also, a boost in these cities’ economies is sending rents higher. New York City alone has seen double rent increases compared to the national average and has the lowest vacancy rate in the nation.

The best rental deals can be found in Las Vegas, Tucson, Ariz., Phoenix, and several cities in Florida–all cities where unemployment and foreclosures remain high. According to Reis, Las Vegas was the only city to see rents fall last year.

However, analysts say that bargains across the country are getting fewer, and renters should expect to see an increase in rents over the next three years.

View the Top 6 Cities Where Buying Is Better Than Renting.

Source: “Rental Market Swings Back in Favor of Landlords,” MSNBC.com (April 12, 2011)

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RE/MAX Alliance Group Still the Market Leader in Sarasota, Manatee and Charlotte Counties!

By | April 19, 2011

DID YOU KNOW……… A few weeks ago the Herald Tribune published a blog that said Coldwell Banker was the local real estate market leader siting sales transaction figures that were incorrect and incomplete as they were skewed toward only one Coldwell Banker franchise.  Luckily, somehow the Trib was made aware of their mistake and last week published an apology to RE/MAX Alliance Group, and a new article that announced that WE are the true market leaders in Manatee, Sarasota and Charlotte counties!
Click on this link to read the article:  http://insiderealestate.heraldtribune.com/2011/04/07/appologies-to-remax-alliance-and-coldwell-banker-remax-alliance-is-still-the-market-leader/

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Flipping Foreclosures Becomes New Game

By | April 19, 2011

More investors are finding a sweet spot in flipping foreclosures, but it’s not the same type of house flipping seen during the real estate boom.

During the housing boom, investors would take advantage of skyrocketing real estate prices and loose lending regulations by buying a property, remodeling, and then selling it for profit.

Today’s flippers are buying at ultra-low prices mostly in cash deals and are doing mostly only minor repairs, such as repainting, replacing appliances, and sprucing up the landscaping. Their profits aren’t as large when they sell, but they may sell more properties in a year, says Penny Boling, the broker-in-charge of Century 21 Boling and Associates in Myrtle Beach.

The ‘Street Sweepers’
Keith Gamble has made foreclosure flipping a full-time job. He purchases properties at a monthly foreclosure sale and usually has about four properties at any given time.

“Some people’s bad fortune is other people’s opportunity,” Gamble says. “I know that sounds callous — I know people doing what I’m doing at the courthouse each month are there to take advantage of that opportunity, but I also feel we provide a backstop to the market.”

The flippers are often taking the neighborhood’s blight and helping to fix up the homes that had been badly trashed from the previous owner. Boling says the investors’ abilities to also pay cash will help the market get through the abundant foreclosures that are plaguing sales.

“They’re kind of like the street sweepers,” Boling says of the property flippers. “They’re part of the cleanup committee of this marketplace.”

Source: “Foreclosures Offer New Twist on Old Game: Flipping Houses,” RISMedia (April 4, 2011)

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Fannie Offers Closing Cost Help for REOs

By | April 15, 2011

Fannie Mae is trying to lure more buyers to its foreclosure properties by offering to cover 3.5 percent in closing costs for home owners who close by June 30 on its HomePath properties.

Fannie’s HomePath program provides low down payment financing on REO property sales and has no requirements for mortgage insurance or appraisals.

During the fourth quarter of last year, Fannie offered closing cost assistance and was able to recoup 55 percent of unpaid principal balance on defaulted mortgages through the sales.

Source: “To Move REO, Fannie Offers Deals to Consumers,” National Mortgage News (April 12, 2011)

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Florida Housing Bucks The National Trend (Again)

By | March 25, 2011

Bucking the national trend (yet again :) ), Florida’s housing market showed rising sales in February and stable housing prices.  This is indicative of where our market has been for the past 2 years.

Out here in the trenches, we can attest to the same – the market is really hot right now and buyers are facing stiff competition for the houses that are priced right and in good condition.  In addition, our inventory is now at a low not seen since the height of the bubble – leading to a LOT of pent up demand.

Courtesy the St. Pete Times:
The performance, which was better than the national picture, builds on evidence of increased stability in the state’s troubled housing market.
Sales of previously occupied homes reached 13,701 statewide, up 13 percent from a year ago and nearly 13 percent from January. In the Tampa Bay area, sales were up 16 percent from a year ago and a whopping 24 percent over the month.
Here’s the full link:
http://www.tampabay.com/news/business/realestate/home-sales-rise-in-florida-in-february-flouting-national-trend/1158717

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Sales surge in December 2010 and Prices Remain Stable

By | January 13, 2011

The Sarasota real estate market saw a big surge in December sales, from 534 in November to 681 last month for a 27.8 percent increase. In addition, the median sales price for both single family homes and condos was up in December 2010, indicating a recovering local real estate market. The property sales breakdown in December 2010 was 500 single family home sales and 181 condos.

The statistics for December 2010 were even better than December 2009. The 681 total sales reported last month topped the 648 sales in December 2009. The median sale price for single family homes stood at $165,000, a small drop from last year’s figure of $170,000, but higher than the November 2010 figure of $160,100. For condos, the median price rose slightly to $160,000 from the previous month’s $159,000, down from last December’s median of $199,000. But condo prices have sunk below the $150,000 level several times in 2010, so the current figure indicates a sign of improvement.

Pending sales remained strong in December 2010 at 789, compared to 764 in November 2010, and higher than the 739 reported last December, when the market was still strengthened by the homebuyer tax credit initiative. This statistic is a strong indicator for the next two or three months of sales, as pending sales reflect current buyer activity. “2010 ended with a resurgent local real estate market, and the higher number of pending sales tells me we could see continued strength in early 2011,” said SAR President Michael Bruno. “For the second half of 2010, there was a fairly steady trend in sales and prices, another sign of stability and recovery. Word of mouth indicates we are seeing more showings and more closings this season than we have in quite a while. And this year, we don’t have the homebuyer tax credit to point to as a reason for the surge. Sarasota is just a great place to purchase a property.”

Inventory dipped in December 2010 to 6,047 from 6,207  – the lowest since August 2010 when 6,039 properties were on the market. The higher sales volume and lower inventory levels meant a major drop in the months of inventory to 7.8 months for single family homes (from 10.9 months in November 2010), and 11.7 months for condos (from 13.3 months in November 2010). The market is considered to be in equilibrium between a buyers and sellers market once the figure reaches the 6 month level.

There was also more good news on the distressed property sales front, as short sales and foreclosure sales once again fell to 44 percent of overall sales, from 46 percent last month. For the entire year 2010, distressed sales made up 36 percent of overall sales.  “The fact that we’re trending downward for distressed property sales is encouraging,” noted Bruno. “We are all hoping 2011 is a turning point and the worst is behind us. The improving national economic picture and recent drop in the national unemployment rate are signs that the economy is heading in the right direction.”

Overall, 2010 sales were up 12.4 percent compared to 2009 – 7,603 to 6,739 total sales. The median sale price for both single family homes and condos for 2010 stood at $163,000. For 2009, the median sale price for single family was also $163,000, and for condos was $190,000.
Sales in the Sarasota market have now risen for two consecutive years since a low point of 5,820 sales in 2008. The level of sales is now at its highest point since 2005.

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November ’10 Market Stats: Local Market Enjoys Sales, Prices Rise

By | December 13, 2010

November 2010 saw resurgence in the Sarasota real estate market, with more sales and higher median sale prices indicating a healthy seasonal boost. There were 534 total sales reported last month, compared to 487 in October 2010 and 553 in November 2009. The median sale price for single family homes rose to $160,100, from last month’s figure of $147,500, and for condos the price stood at $159,000 – slightly higher than the October 2010 figure of $158,525. The stability in the median sale prices shows signs of improvement.

Overall sales rose by 9.7 percent in November 2010 compared to last month, but about 7 percent lower than last November, when the $8,000 homebuyer tax credit buoyed sales as the initial period was due to expire. Looking at the most recent five months, there has been a fairly steady trend in sales and prices, a sign of recovery.

Pending sales were also strong in November 2010, and at 764 were very near the total in November 2009 (793), when the market was strengthened by the homebuyer tax credit initiative. With no tax credit currently in effect, the high pending sales figure is evidence of a stronger market. This statistic is a strong indicator for the next two or three months of sales, as pending sales reflect current buyer activity.

The property sales breakdown in November 2010 was 369 single family home sales and 165 condos. Condo sales saw the biggest resurgence, growing 21.3 percent from October 2010.

“There certainly appears to be a solid foundation for consistent, stable sales and prices as we enter the new year,” said 2010 SAR President Erick Shumway. “While the foreclosure situation remains a potential barrier to quicker price appreciation, the local market seems to be absorbing that factor and adjusting to the new reality.”

The median sale price for single family homes over the past 12 months was $163,000, and for condos was $165,000. Last year at this time, looking back over the previous 12 months, the median sale price for single family was $160,000, and for condos was $198,500.

Inventory rose slightly in November 2010 to 6,207 from 6,069 in October 2010. But due to the higher sales volume, the months of inventory for single family homes dropped to 10.9 months in November 2010 from 11.1 months in October 2010. The figure was 9.4 months in November 2009. Months of inventory represents the number of months it would take to sell all available homes at the current pace. For condos, the figure fell to 13.3 months in November 2010 from 15.9 months in October 2010. It was at 14.6 months in November 2009. Once the market reaches the 6 month level it is considered to be in equilibrium between a buyers and sellers market.

There was good news on the distressed property sales front, as short sales and foreclosure sales fell to 46 percent of the overall sales. Much lower sales prices for distressed sales continue to be the primary reason for the overall median price at a level lower than would be expected, with normal arm’s length sales garnering three-times as much as bank-owned properties, and twice as much as short sales on average.

“The level of distressed sales dropped in November to 46 percent, from 50 percent in October and 54 percent in September,” noted Shumway. “There are still two distinct markets in the Sarasota area – one consisting of distressed sales, and the other normal, arm’s length sales. But it’s encouraging to see that downward trend, and once the distressed sales get back to a normal, historical percentage, we should see a return to traditional appreciation levels.”

Click HERE for the complete press release in PDF format, plus three pages of statistical charts.

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The Today Show: Sarasota Is The #1 Place in the US To Buy A Home

By | November 29, 2010

Thanks, Today Show, for telling the country what so many of us already know:

Visit msnbc.com for breaking news, world news, and news about the economy

Home sales are surging at an incredible pace as the national economy rebounds; the average sale price went up 13% in the last quarter, inventory is at its lowest point since before the boom (yes, BEFORE the boom) and buyers are getting into bidding wars over the best properties on a regular basis.

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