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Buy Now, While Supplies Last

At first blush, one would hardly expect to find a single Florida city—much less SIX of them—on Forbes’ new list of the Top 25 Recession-Proof Cities for Real Estate. After all, Florida was at the epicenter of the real estate downturn that helped drive our nation’s economy into one of it’s worst-ever recessions.

But there they were, all but dominating the 2011 list prepared by the real estate web site Zillow.com. Five of the six—Sarasota-Bradenton, Punta Gorda, Ft. Myers, Destin and Pensacola—are on Florida’s West Coast. The sixth, Port St. Lucie, is on the state’s east coast. No other state placed more markets on the list.

Zillow’s list of winners reflects the 25 top metro areas (out of 154 surveyed) that have experienced steady home price gains during each consecutive month since the beginning of 2011. These are not markets where the economy as a whole has necessarily improved. Instead, they are places where—in spite of high unemployment and other economic challenges—real estate is showing marked signs of improvement; after having spent the better part of the past five years correcting over-inflated prices born of the boom.
To calculate home prices in these 154 cities, Zillow documented home values on local single-family houses, condos, and apartments across all price ranges. Using data through June of this year, including median home prices, list prices vs. final sale prices on homes sold, price cuts on for-sale homes, tax assessment records, and local rental prices were all cross-referenced. Both homes that have been on the market in recent years—as well as those that haven’t—were included. Foreclosure activity and its effect on non-distressed home values was noted, but foreclosures and bank-owned properties themselves were not factored into the calculations.
Personally, we think the phrase “recession proof cities” is a tad bit too rosy; as clearly ours is a region recovering from one of the deepest and most stubbornly persistent economic downturns in history. Still, the current MLS shows that our inventory of available properties has been reduced to just a six-month supply, based on the current rate of sales. Six months is typically the dividing line between a buyers’ market and a sellers’ market. That being said, “recession resilient” might be the better choice of words. Our market is coming back.

Nearly all of the top 25 markets possess at least one major mitigating factor that will turn a cyclical real estate downturn into a major comeback every time. Many of the winners are large university towns with a guaranteed annual influx of newcomers. Others, like Washington, D.C., are government hubs where a large population turnover is a way of life every four years. For Sarasota-Bradenton and Punta Gorda, the attraction is purely one of climate and aesthetics. People come here for the weather, our enviable palate of cultural, recreational and educational choices; and, of course, our award-winning coastal lifestyle.

According to Zillow’s survey, Sarasota-Bradenton’s median price has dropped by 22.1%—and Punta Gorda’s by nearly 51%—since 2006. As a result, buyers have confidently stepped-up to buy; and in doing so have reduced inventories of available properties to their lowest level in five years. A significant number of these sales have involved all cash, which suggests that the smart money is investing in real estate for its overall record of consistent long-term appreciation. For indeed with demand for the best-priced properties beginning to outstrip supply, we’re finally seeing the first signs of a return to healthy appreciation.

In the first quarter of 2011, Zillow calculates that prices in Sarasota-Bradenton rose by 3.4; and in Punta Gorda by 0.4%. In the second quarter, Sarasota-Bradenton prices rose by 6.7%; and in Punta Gorda by1.9%.

Being named one of America’s most “recession-proof” markets isn’t nearly as glamorous as having one of your local beaches crowned best in the U.S. But with Wall Street giving investors a severe case of the jitters, buying real estate in a market that has historically rewarded buyers over the long-term is a proposition well worth considering. That is, while supplies last.

  • User Gravatar Linda McKenzie
    August 25th, 2011

    Great ARTICLE and comments – wonderful to share.

  • User Gravatar ted jeffries
    August 30th, 2011

    thanks 4 your newsletter

  • User Gravatar robert allen
    September 4th, 2011

    very good articles i was very impressed since we are planning to move to sarasota-venice area in the near future we are looking to work with your company. thank you

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