What 2012 – Better Yet – 2013 Means in this Market
As we progress into the New Year let me first say “Thank you for a fabulous 2012 and may 2013 bring you happiness and prosperity.” Turning the page on a new year is reason to take a step back, evaluate what has happened in the prior year, and anticipate a new year ripe with opportunity. It almost sounds strange saying “ripe with opportunity” after what we have experienced for the past 7 years but indeed there are many signs that the economy in general and specifically the real estate market are headed in the right direction. Since our Southwest Florida market is really divided into two distinct segments, Naples and Fort Myers, I will run down some general statistics.
Fort Myers first, The median price of a sold home rose an astonishing 33.8% from $100,000.00 to $133,800.00 and at the same time the average days on the market came down to 87 from 92. The other statistic to note is that the current listing inventory provides a 9 month supply which is considered to be slightly a buyers market. Inventory levels have increased from a 7 month supply in the past month because our season is in full force. As one might expect, along with the increased prices has come 13% fewer sales.
Naples on the other hand has shown both increased sales and an increased median price. The number of transactions actually rose by 5.1% in 2012 and the median price rose from $160,000.00 to $215,000.00. The two stats that separate Naples from Fort Myers are the average days on the market and listing inventory. While the average days on the market dropped in Naples it still hovers at 169 days (almost double that of Fort Myers). Also of note is that current listing inventory provides an 9.7 month supply at current sales levels.
One of the interesting facts that we uncovered in analyzing this data is that while the number of sales had dropped in Fort Myers, the number of dollars in gross sales was almost exactly the same. Now that you know the statistics for the past year, the question remains, what lies ahead for 2013? I might best answer that by saying that “there is energy in the air”. While there is still uncertainty about our government and our economic stability people are beginning to resume their lives again. Seven years of hiding is enough for most and they feel that it is time to capitalize on the once-in-a-lifetime buying opportunity. The National Association of Realtors has produced a “Housing affordability index” since 1970 and in November the index stood at 198.2 indicating that housing was at it’s most affordable level since the record keeping began.
Lawrence Yun, NAR chief economist, said home buyers are able to stay well within their means. “Although 2012 was the most affordable year on record, the excessively tight underwriting precluded many would-be homebuyers from locking-in generational low interest rates,” he said. “Rising home prices and a gradual uptrend in mortgage interest rates will offset improvements in family income, but 2013 likely will be the third best on record in terms of household buying power. A window of opportunity remains open for buyers who can qualify for a mortgage.”
My own belief is that this year offers great opportunity for those thinking about purchasing in Southwest Florida. We are clearly off of our bottom and the insanity has subsided and replaced itself with a more stable and certain environment.
The market is ripe for the picking and Brad and I want to make sure that our friends and clients are the ones to capitalize on it. Cheers to a great 2013!