The Great Buyers’ Market of 2010
Our nation has been experiencing a one-day-at-a-time economic recovery, punctuated by fits and starts. Finally, however, the good news is consistently outweighing the bad; allowing for a sustained measure of confidence to seep back into our battered psyches. In fact, consumer confidence across the U.S. rose in January to the highest level since September 2008 as new signs of recovery caused Americans to feel more optimistic about their immediate futures. Florida’s consumer confidence index also rose unexpectedly in January—by five points, to 74—with the biggest jump being in the perception of whether it is a good time to buy big-ticket consumer items.
For sure, confidence has at long last trumped fear and trepidation with respect to our local housing market. The months-long buying binge in the price tiers below $400,000 is showing no signs of letting up; especially as season revs into high gear and buyers continue to compete for pared-down inventories of lower-priced properties.
This should come as welcome news to everyone—including pundits, prognosticators and seasoned market watchers—who believes a recovery in the housing and labor markets are the essential ingredients for restoring our nation’s overall economic health. Moreover, while virtually every housing market in Florida continues to grapple with the twin hurdles of high unemployment and record foreclosures, Southwest Florida’s has been on a solid trend toward recovery and price stability for the better part of the last six months in spite of these serious and ongoing obstacles.
While the U.S. experienced a 16.7 percent dip in existing home sales between November and December of last year—the largest such monthly decline in more than 40 years—Sarasota-Manatee veered hard in the opposite direction; notching a 43 percent increase in existing home sales; while Charlotte County posted an equally impressive 42 percent increase. Furthermore, while December’s decline in national sales was largely attributed to buyer belief that time had run out on the first time home buyers tax credit, that perception did nothing to put the brakes on sales in Southwest Florida. In fact, the last time our region saw a monthly decline approaching 17 percent in unit sales of existing homes was between July and August of last year. Since then, sales and pendings have shown nothing but consistent improvement.
At year’s end, while the entire Sarasota-Manatee market finished up 15 percent in unit sales over 2008, the agents of Michael Saunders & Company actually posted a 30 percent increase in company-wide, year-over-year sales.
Prices in our market have obviously reached a threshold where buyers are confident enough to buy without a government incentive at their back. In fact, median prices in Southwest Florida rose in December in sharp contrast to the statewide median price which, at $140,400, was 10 percent below last December. In Sarasota-Manatee, December’s median price of $167,400 was 5 percent higher than last December; and 4.6 percent higher than the previous month. Charlotte County’s median price of $111,800 in December was 9 percent higher than last December; and an 8 percent improvement over November.
The unknown quantity in all of this, of course, remains the number of foreclosures that continue to challenge the pace of our recovery. Recovering prices and a sense of normalcy returning to the market will go a long way toward reassuring many homeowners—who owe more than their homes are presently worth—to stay put. As well, prices set on the newest foreclosures—if valued according to so many recent comparable sales—should also reflect the market’s strengthening position. A rising tide lifts all boats.
Of course, fewer foreclosures will enter the pipeline when fewer jobs are lost and more is done to help homeowners already threatened with foreclosure. Under a new mediation program just put forth by a Florida Supreme Court order, every local owner of a homesteaded property in danger of foreclosure will be afforded an extra layer of protection against losing their homes; including access to a trained mediator to facilitate a meeting with the lender about short sales, loan modifications and other alternatives to foreclosure—held at the lender’s expense.
Meanwhile, even as this is column is being written, the Institute for Supply Management has issued its report for January that bodes well for eventual across-the-board job growth. Manufacturing grew for the sixth straight month in January to its strongest level in five years—with 13 of its 18 industries reporting expansion; its index of 58.4 much higher than analysts had predicted. At the same time, current levels of production, along with new orders—traditional harbingers of future growth—surged to their best showings since 2004. Order backlogs also grew, all of which may soon encourage companies to start hiring again.
From our own perspective on the local housing market, 2010 is already off to an auspicious beginning. For the month of January the agents of Michael Saunders & Company more than doubled last year’s sales volume for the same month; while coming within a fraction of doubling their unit sales as well. As fragile as our market’s recovery will remain through at least mid-year, we’d like to think that our present momentum will beget that much more momentum as buyers rush to catch the tail end of the great buyers’ market of 2010.
On behalf of our more than 500 agents from Bradenton to Punta Gorda, Michael Saunders & Company would like to thank the readers of the Sarasota Herald-Tribune for voting us the “Best Real Estate Company” in Southwest Florida.
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