After noting all the recent snippets of good news about the economy apparently inching its way toward recovery, one is almost tempted to chill the glasses and ice the champagne. Having ridden the doom and gloom express for more than a year, the media is suddenly the good news bandwagon; positively tripping over each other to report all the positive developments on the economic front. The stock market is running with the bulls again. New home sales rose more than expected in June; while existing home sales rose for the third consecutive month. Nationwide—as in Southwest Florida—inventories of available homes are easing and prices are declining less sharply. Consumer spending is up for the second straight month; and construction spending rose for the second time in three months. Moreover, the government’s gross domestic product report shows that the economy shrank at a one percent annual rate in the second quarter of 2009; which doesn’t exactly sound all that good until you realize that the numbers are a vast improvement over similar figures released earlier this year. Although the pundits sound nearly unanimous in their view that the deepest recession since the Great Depression is winding down, most of this good news has actually been delivered imbedded in what normally passes for bad news.
We certainly don’t mean to suggest that we’re being misinformed. Every single report of a recovery in progress is sensational news; but we need to temper our enthusiasm by remembering that “in recovery” is not the same as “recovered.” The good news from the ivory towers of business, government and news organizations is way out ahead of the shuttered reality of closed shops on Main Street. Unfortunately continued high unemployment is the last vestige of a tenacious recession and one of the leading causes of new foreclosures. Anyone who thinks differently should have been the proverbial fly on the wall at the Venice Community Center last Saturday morning. Here for the better part of a day, Sarasota County hosted its first Hope for Homeowners seminar to offer rock-solid free advice to those facing foreclosure, bankruptcy and/or credit problems.
By the time the doors swung open at 9:00 a.m., the large parking lot was fast approaching capacity and the audience of those waiting to hear the morning’s main event—a panel discussion on foreclosure avoidance—had swollen to standing room only. Additional chairs had to be brought in to accommodate the overflow crowd of more than 250 people who showed up well before the event kicked-off; intent on learning how to save their homes. Outside the discussion room, another swarm of attendees craned their necks to hear what advice was being offered even as they browsed a number of booths offering every manner of free legal advice and social service.
Are these the faces of economic recovery? Hardly. These are the faces of families, friends, neighbors and co-workers who have either lost or are in danger of losing their homes, jobs or businesses, credit-worthiness; or all of the above. They are a cross-section of faces from every station and walk of life, proving in no uncertain terms that the housing crisis in Southwest Florida is an equal-opportunity catastrophe.
These are the faces of young couples, new families, senior citizens, single men and women, white- and blue-collar professionals; and people of all colors furiously taking notes as the panel unfolded, united in their efforts to stave off foreclosure or at least exit their homes in the least detrimental ways with dignity in tact. After Judge Lee Haworth, the Chief Judge of the Twelfth Judicial Circuit, finished moderating the superb, information-packed discussion, the queue to ask follow-up questions was at times 20 persons deep.
Judging by the massive turnout for such a serious event on a sunny Saturday, Sarasota County will no doubt reprise the seminar at other locations in the very near future. They did a superlative job and should be commended for providing free of charge one of the most important civic functions of our time. Additionally, we are very proud at Michael Saunders & Company that Joan Erni—our tireless expert on foreclosures and short sales—played a key role in helping to organize the event.
The region’s housing malaise—while admittedly improved—has a long way to go before it fully recovers. There are promising signs of recovery to be sure—especially in the market for properties under $300,000—but to get a true sense of when the overall market will improve you needn’t look much further than the number of new foreclosures expected to elbow their way onto the market. Before the end of 2009 more than 8,000 Sarasota County homeowners will face the prospect of foreclosure; hopefully far fewer with these extremely helpful seminars. Until this tsunami of foreclosures subsides, however, our market will continue to see unit sales improve even as prices marginally decline.
If you’re a seller, now is by no means the time to consider raising your price—or refuse to negotiate an unacceptable first offer—based on the media’s declaration of an imminent end to the recession and recovery on the horizon for the housing market. Although the beginning of the end may well be here—or at least very near—the bottom of our local real estate market has yet to reveal itself. When it finally does, prices are expected to drift sluggishly along the bottom for some time before even a whiff of appreciation is detected.
If you’re a buyer, now remains the best time to buy a home in more than a generation, especially with low interest rates and the First Time Homebuyers’ Tax Credit easily offsetting any additional price declines. The deadline to qualify for the tax credit—November 30, 2009—is creeping up fast, especially if you’ve yet to begin your home search.
