“This city was among the first in the nation to fall victim to the real estate collapse.  Now it seems to be in the earliest stages of a recovery, a hopeful sign for an economy mired in trouble and anxiety.”  David Streitfeld wrote last week in his column for the New York Times.

Although Streitfeld—a veteran real estate reporter—was referring to Sacramento, CA in the article entitled “Where Home Prices Crashed Early, Signs of a Rebound,” he could also be describing Southwest Florida; which likewise boomed early, crashed sooner and where the earliest signs of recovery are abundant in both statistical and anecdotal evidence.

If Sacramento—as Streitfeld suggests—was ground zero for California’s boom and bust, then Sarasota-Bradenton is among a handful of markets vying for the same dubious distinction in Florida.  We boomed very early in what was destined to become a national housing bubble, then were among the first markets to feel the downturn; which, as we well know, cascaded full-throttle into a nationwide meltdown.

In the same news cycle a few weeks ago, Steve Bergsman—a real estate columnist for Inman News—made a similar observation in his article “Home Sales Boom in ‘Busted’ Markets.”   He said:  “The odd secret in America’s housing data is that most of California, Phoenix, Las Vegas and Florida—that experienced the largest corrections after the housing bust—are now reporting the greatest percentage increases in housing sales.”

Clearly Sarasota-Bradenton qualifies as one of these “first in-first out” markets; although the vast majority of new sales—both here and on the West Coast—involved properties under $400,000.  That’s to be expected.   When markets revive, they do so from the bottom up; and even when the recovery weaves its way up into the upper price tiers, it is still the most aggressively-priced homes that sell first.  Moreover, while 1st Quarter 2009’s median home price is 40% below the same time last year, this drop in price is exactly what set the stage for the dramatic rise in unit sales we’re experiencing now.  Although it’s too soon to say whether the region’s median home price has bottomed, March saw the first month-over-month median price increase in a year—4.1%.

With consumer confidence on the rise—as news from the various markets continues to trend positively—the rush to take advantage of rolled-back home prices, low interest rates and the $8,000 First-Time Home Buyer Tax Credit is expected to gather additional steam. Something of a misnomer, the First-Time Homebuyer Tax Credit—which expires on November 30—is available to anyone who hasn’t owned a home in three years.

Statistically speaking, TRENDGRAPHIX—the industry’s best tool for identifying local market trends, based on actual closed and pending sales—paints an encouraging picture of a recovering Southwest Florida.  In a nutshell, closed sales—up significantly over the past few months—have pushed inventories to their lowest levels in 40 months.  At the same time, pending sales were up 28.3% between February and March; and up again by 18.38% between March and April.  Pending sales are strong indicators of closed sales to come within the next 30 to 60 days.  Meanwhile, the number of days it takes to sell a home in Sarasota County has shrunk by two-and-a half two months—from 208 days in April 2008 to 134 days in April 2009.

While much of today’s improved activity admittedly involves foreclosures and short sales—with more predicted to hit the market before the crisis subsides—the next wave probably won’t devalue the market as much as the media has conditioned us to believe.  Foreclosures and short sales are the market in places like Florida, California and Nevada.  When the media examines the impact of Southwest Florida’s high foreclosure rates, they typically fail to inform their readers that we also have one of the fastest foreclosure resale rates in the nation, often with multiple offers.

In Sarasota, for example, the most desirable foreclosed properties—those not in wretched disrepair and in need of costly restoration—frequently receive five to ten offers per property.  Consequently they move on and off the market quickly.  So even though more are expected, lenders are unlikely to market them for much less than they comparably sell for right now.

Investors and first-time home buyers—the traditional harbingers of a housing turnaround—are out in increasing numbers competing for the best foreclosures.  Meanwhile the savviest buyers realize that non-foreclosure properties—which are much more likely to have been properly maintained—must be priced in line with comparable foreclosures if their owners wish to sell in a reasonable time frame. Prices may still decline marginally; but as long as the current trend in increased unit sales continues—as pendings suggest they will—prices will eventually stabilize.

Meanwhile, interest in Southwest Florida outside the area remains unusually high.  In fact, the Division of Relocation and Referral Services at Michael Saunders & Company has experienced a 129.5% increase in incoming referrals for the first quarter of 2009, versus the same time last year.  Fully a third of these have already been converted into closed sales.  At the same time, the company’s Appointment Center remains inundated with calls to schedule showings at rates not seen even at the height of the housing bubble.

The news of late has been downright encouraging; with many a pundit and prognosticator suggesting the worst days of the recession are behind us.  That’s wonderful to hear; but irrespective of when it does finally play itself out, you can rest assured the real estate market in Southwest Florida is already well on its way to restored equilibrium.