How Obama’s Re-Election Affects Florida Real Estate
No matter which side of the coin you landed on for the Presidential Election, Tuesday night’s results will undoubtedly affect each and every one of us. Here is my take on how the Florida real estate market will be affected for this coming 2013 “season” based on the re-election of President Obama.
To get our first clue on the overall business outlook of the decision, we have concrete numbers from the closing of the DOW yesterday. Losing 312 points in a single day displays the level of excitement investors have with the election results. Also, based on the fact that our market in Southwest Florida is very dependent on medium-to-high net worth Snow Birds, future tax implications could be problematic going forward. January marks the beginning of the ObamaCare 3.8% tax on certain investments (including real estate). Please click the link for a very informative explanation and scenarios. The tax will NOT be imposed on ALL real estate transactions as some sources have stated.
On a positive note, the real estate market has been improving over the past 3 years under the current administration. According to statistics through the Greater Fort Myers Multiple Listings Service, the past 30 days have produced an average sales price of $177,000 of all residential properties, compared to $127,570 for the same period in 2010 and $145,000 in 2011. That’s a whopping 38.7% increase since 2010! One thing to note in the same time frame, total sold properties within the 30 day period were 1,408 compared to only 1,129 this year. As prices are predicted to increase throughout our season, I would expect the total number of transactions to stay lower this year compared to the previous three years.
At the end of the day, having just under 7 months worth of inventory on the market can be viewed as a very healthy market. In my opinion, buyers who have been on the fence need to pull the trigger quickly in order to miss the upwards market movement which is likely to occur in season. If you are looking to sell, this season will be your best opportunity in over 5 years. Time will tell what Obama’s re-election impact will be, but for now we need to embrace the positive signs we see in the marketplace.