No snow in Florida
During the second week in January while the northeast was digging out of the second major snow storm in as many weeks, the state of Florida was the only one in the country that didn't have snow. Even Hawaii experienced snow in some of its mountain areas, but in the Sunshine State the sun kept shinning.
The Wall Street Journal recently reported that sales in many vacation communities across the U.S. soared last year to levels not seen in a very long time. They point out that the second home market has been driven by deep discounts, cash purchases and buyers' rising stock portfolios.
The paper profiled four traditional vacation and second home markets in the country highlighting the percentage of increase in numbers of properties sold last year. Barnstable County on Cape Cod, Mass., increased 9 percent; Hilton Head, S.C. increased 13.6 percent; the waterfront community of Mercer Island, Wash., increased 181.8 percent and Palm Beach, Fla., increased 39.3 percent. The sales volume in Palm Beach is now comparable to the 2007 peak. In some markets around the country, as stated by Lawrence Yun, the National Association of Realtors' chief economist, prices have come down so low that buyers are starting to fight for some of these vacation properties.
The article points out that, according to the National Association of Realtors, only one in 10 real estate transactions are generally for the purchase of a vacation home. However, even though this is a small fraction of the overall market, it is significant because vacation homes are often big ticket properties and attract discretionary buyers.
A few days after the Journal published this report, it printed a story about the National Association of Home Builders' annual meeting in Orlando. The group's chief economist, David Crowe, predicts growing consumer confidence based on new jobs being created, a robust holiday sales season and better than expected sales of cars and furniture in 2011.
As far as general pricing around the country, 2011 is expected to remain flat with some gains next year going forward. According to Freddie Mac, mortgage rates will continue to go up, reaching around 5.25 percent by the end of the year.
These reports are pretty much a mixture of the good with the bad. Being a prime vacation area, Anna Maria is certainly seeing a considerable increase in sales with an increase in appreciation the inevitable outcome. Buyers are starting to get off the fence with their purchasing decisions and can only hope that the train hasn't already left the station when it comes to getting the best properties for the best price at the best interest rates.
And don't discount the ability of cold snowy weather to drive people south. In addition, this is the first year of that enormous baby boomer retirement bubble. Boomers with the ability to buy their retirement homes should do so now before they find themselves really out in the cold.
It may get a little chilly on Anna Maria in January but highs of 50 and 60 degrees is a long way from 24 inches of snow. So just sit back and let Mother Nature do her part in revitalizing the real estate market. Not to worry, mother will make it all better.
