Low prices, low rates equal affordability
It seems almost unbelievable that, in spite of the national and world economy, two wars, a never ending national debt and an oil spill our real estate market should be surging ahead. But not only is this a fact of our local market, but the surge extends to the state of Florida as well.
The sales statistics for single-family homes from the local and national association of realtors for the month of May are in and looking very encouraging. As reported by the Bradenton Herald, the combined Bradenton and Sarasota sales statistics show a 31 percent increase in sales from May 2009.
This represented the 11th consecutive month of year-over year sales gains in the Sarasota-Bradenton market. Also, sales prices were up a modest 6 percent in the Sarasota-Bradenton market. Condo sales continue to lead the market in Sarasota-Bradenton. with a 71 percent increase in number of units sold from last year.
In addition, statewide the number of sales also increased 18 percent over May 2009. This increase represented the 21st consecutive month sales activity has increased in the state. Nationally, sales were also up but only by 2.7 percent in the median sale price.
According to the Manatee Association of Realtors, the median selling price for Manatee County only was up by an impressive 27 percent compared to last year, changing the median selling price from $165,000 to $210,000. The average Manatee County sales price for the same time frame was $205,949 for 2009 and $271,412 for 2010, an increase of 32 percent.
The supply and demand statistics, number of houses sold, were also up from May of last year.
There were 343 single family houses sold in May this year compared to 284 last year, an increase of 21 percent. In addition, the under contract numbers have increased from 337 last year to 437 this year, 30 percent. However, one of the true barometers of this surge is in the number of properties for sale, which was down 14 percent from 4211 last year to 3619 this year, still big numbers but gradually eroding.
Other good news for the housing market was the Federal Reserve’s anticipated decision to make no changes in interest rates. On June 23, the Feds voted to keep the key bank lending rate at between zero and 0.25 percent. This rate has remained at this level since December 2008.
The benefit of this will mean that rates on certain credit cards, home equity loans, some adjustable rate mortgages and other consumer loans will remain low. In addition, commercial banks’ prime lending rate would also stay at about 3.25 percent, the lowest in decades.
Hopefully, the low rates will spur Americans to spend more particularly on housing and help invigorate the economy. The Fed has pledged to keep rates low for an extended period of time with the anticipation being that an increase will not be seen until the end of 2011 or even 2012.
Conventional fixed-rate mortgage rates are not always affected by what the Federal Reserve does, but lower rates in other areas of the economy give consumers a reason to change their attitude about buying everything.
So believe the unbelievable, low prices and low rates equal affordability, and, of course, we’re still Florida.