SUN PHOTO/CHANTELLE LEWIN
Foreclosure proceedings on the
Beach Inn in Holmes Beach began on April 30.
One person’s good fortune may come from another’s bad luck. Those in the real estate industry say the bad news scenario right now is the fact that home prices have reached an all-time low. On the other hand, that’s the good news for real estate buyers.
According to a newsletter published online by Island Real Estate Agent Al Galletto, from Jan. 1 to May 31, the average price of a single-family home sold on the Island dropped from $817,102 in 2008 to $567,477 in 2009, and the median price of a single-family home dropped from $625,000 in 2008 to $450,000 this year.
Bad news for sellers, but great news for buyers.
Galletto’s newsletter says that property sales on the Island for the month of May were above average with 23 (11 single-family, 10 condos and two duplexes), although a little less than a year earlier, when 27 properties (14 single-family, nine condos, three duplexes and one lot) sold. His figures are based on reports through the Multi-Listing Service.
The good news for sellers is that 50 properties are under contract and the inventory of homes for sale is dropping. Galletto said the levels of inventory are the lowest since the fourth quarter of 2005, just before the last real estate boom came to an end. With those forces at work, the price of real estate just might turn upward in the near future, he said.
"Prices right now are down 30 to 40 percent, with waterfront prices down less than that," Galletto said. "I feel we’re pretty much at the bottom."
Betsy Hills Real Estate owner and broker Betsy Hills has been working on the Island for more than 30 years, and she says certain properties are selling well.
"We’ve seen a bounce in homes costing $600,000 and under," she said. "The homes that are selling are the ones that are priced competitively."
Hills said she has more contracts pending than she’s seen in a while and the financing is there. She said distressed properties, those that are selling for less than what is owed on them, are rare on the Island compared to the mainland.
"Sellers are bringing money to the closing to make up the difference, except on the Island," she said.
"I definitely think that interest is picking up," said Darcie Duncan, owner of Duncan Real Estate in Anna Maria. "Consumer confidence is coming back."
Duncan said that a lot of the people who are buying tell her that they think prices are reaching bottom.
"They think it is a golden opportunity since inventories are still high and interest rates are low," she said.
Nicole Skaggs, of A Paradise Realty, said she is twice as busy as she has been in the past.
"I am seeing investors going, ‘So what if its hasn’t bottomed out, it’s so close it doesn’t matter,’" she said. "Some of them follow the advice of Warren Buffett who says, ‘If there’s fear, be greedy.’"
Skaggs said she’s seeing more cash sales and she feels more people will start coming back to real estate as an investment.
"If you’re starting from the bottom, you should buy now, rent it out and take your vacation there for free," she said. "You can depreciate your taxes and write off your vacation because you’ll be maintaining your investment."
All in all, the real estate professionals on the Island say that if you’re planning to wait a year to purchase a home or investment, the common school of thought is that you’ll be paying more than you should by then.
"Purchasing Island property is always a win-win," Galletto said, "Now is the time to buy and we’re still a good investment."
"I feel we’re much safer than the stock market," Hills said.
"Most people who wait for the market to bottom out, get into the market when it’s too late," Duncan added.
"Real estate is cyclical and it is historical," Skaggs said, "When you look at the Rockefellers and the Carnegies, they bought property when times were bad and they emerged better than the others."