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January 18, 2009 - by news-press.com
Lee County's secret: Existing home sales set record
The number of properties sold outpaces even the boom years
"Really, how is the real estate market?" This is probably the most frequently asked
question in our area.
If you had to answer that question by using just two words, what words would you
use? Need a minute to think of one? Don't worry, the number of words to choose from
only pales in comparison to the number of properties we have in the foreclosure
pipeline. A couple of words I often hear used have something to do with making a
drinking straw work.
My favorite answer used to be, "It's unbelievable." I liked that response because
it answered the question truthfully and it seemed to satisfy the person asking the
question, regardless of their perception of the market. "Unbelievable" could be
interpreted two ways. Those that were bullish on the market's recovery would nod
their heads in agreement and say, "You got that right," as would those who couldn't
wait to see the sign "Welcome to the Sunshine State" in their rear-view
mirrors.
My new favorite two-word answer is "record-setting" because Lee County's existing
home market just had the best fourth quarter of record. According to the local
Multiple Listing Service, more than 3,100 homes went pending in that time period,
which exceeded the previous fourth quarter record of 2,400 that was set in 2004.
Not only did we shatter the old record by almost 30 percent, but 2008's performance
was almost 130 percent better than the same time frame last year. To add an
exclamation point to the record-setting quarter, the last three months represent
the best three-month performance our market has seen, ever.
Our year-end numbers were impressive as well. Last year's existing home sales ended
up 78 percent above those of 2007. In fact, 2008 was the third best year of record,
eclipsed only by the irrational years of 2004 and 2005. You may be tired of hearing
this -after all isn't the media bombarding you with the same information?
The condominium market is showing modest improvement as well. Fourth-quarter sales
were up 30 percent over the same time period last year and year-end sales were up
32 percent over 2007. The number of condos sold is far from record-setting because
the sales pace is similar to what sold in 2000, but at least it's a step in the
right direction.
The sales momentum in each market segment is directly related to how quickly prices
react to what buyers are willing to pay in a falling market. For example, the
median sales price for single-family homes that sold during the last three months
was $99,900, down 55 percent from the same time period last year. The main reason
for such a drastic fall in the median sales price is that hundreds of bank-owned
homes have been introduced into the resale market.
On the other hand, the price of condos fell at a slower pace because there are
fewer foreclosures forcing prices to lower levels. The median sales price for
condominiums was down 37 percent when comparing the fourth quarter performance of
the last two years. Condo owners may mistakenly interpret this as a sign that the
condo market is closer to equilibrium, when in reality it probably signifies that
it is further away from full recovery.
Could 2008 have been better? Sure, but if we could roll back the clock to the
beginning of 2008 and see how 2008 would actually unfold, we would be filled with
optimism, because last year was a marked improvement over 2007. That's
progress.
The most amazing thing about the strides our market has made over the past 12
months is that it happens to be Lee County's biggest secret. There seems to be more
talk about all the negative news and a total disregard for our market's growing
momentum.
For example, a reporter was doing research for a story on our market and she called
me for my thoughts. When I finished giving her my perspective, using most of the
above information, she was dumbfounded. She then asked, "Why isn't the media
reporting this?" I thought that was a strange question coming from someone who
worked for the media. She's not alone because the majority of the people I talk to
are shocked to learn that some segments of our market are actually setting
records.
Regardless of the two words you use to describe the state of the market, it does
not change the fact that 2008 was a good year.
Keep the faith.
Source: http://news-press.com
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