Are you IN or OUT?
Most of you receiving this newsletter have either recently purchased real estate from us or are contemplating doing so in the near future. Recent data tells us that if you have not already made your move you might want to do so within the next few months. Just this past week the Naples Board of Realtors had their “Economic Summit” entitled “The New Future, A View From the Top”. There were five speakers, most notably, Lawrence Yun, chief economist and Senior VP of research for the National Association of Realtors, Shelton Weeks, economics and finance department chairman at FGCU, and John Tucillo, Florida Realtors Chief Economist. Of their many observations and predictions the following stand out.
• Housing inventory is down in Naples by 13%
• Pending Sales have increased 14% in the 300 to 500 thousand dollar and the 1 Million to 2 Million Dollar categories
• Pending Sales have risen 29% in the 500 thousand to 1 Million dollar category
• The high percentage of cash transactions in this market minimizes strict lending restrictions placed by financial institutions.
According to Lawrence Yun the current pace of sales is the first step in the healing process and that prices will firm as a result. He estimates that prices will rise by 10% by December 2012. (We will see about that but it is encouraging to hear none the less.)
As for Shelton Weeks, he believes that the key to a full recovery is in the expansion of the economy. He notes that there is currently a slow and steady expansion going on that bodes well for sustainability. Unemployment figures in both Collier and Lee counties have dropped by 2% points in the past year.
John Tucillo commented that distressed inventory will take up to 3 years to clear out but that it is no longer a disruptive force in the market.
I believe that lenders have finally learned that they are better off cleaning up these properties and releasing them slowly to preserve the values in the surrounding neighborhoods. The latest numbers released by the Florida board of Realtors shows that the median price of a single family home has risen by more than 10% as well. There is a lot of evidence that the market has strengthened and very few signs that it will retreat any time soon. Couple this with historically low mortgage rates and it is easy to see how I arrive at my conclusion that it may very well be time to get in the game.