In real estate location is everything
At the risk of lowering my writing standards with the use of a well worn cliché, I need to say it again; what’s the most important thing in real estate? Location, location, location. This has never been truer than in our fledgling real estate market which is just starting to get its legs out under it.
The proof of this is a recent survey conducted by the Internet search engine Zillow indicating that real estate markets are not experiencing a recovery equally. What they report is not that startling - basically homes in sought-after areas are recovering faster than homes in marginal neighborhoods. As demand in these areas increases prices start going up, ultimately pushing buyers into some of the less desirable areas eventually producing a nationwide recovery.
Zillow just confirmed what everyone on Anna Maria already knows, sales are through the roof with some properties entertaining multiple offers. As reported in this paper, May sales in the three cities on Anna Maria were the highest since 2005. In addition, under contract sales are also at an all-time high and available inventory is down from last year. The average sale price of single family homes on the Island is just under $600,000 and the average for condos is just under $300,000.
Manatee County in general is also showing a very healthy increase in sales volume and prices. According to the Manatee Association of Realtors’ website, sales of single-family homes increased 17.4 percent from May of last year. In addition, the median sales price also increased 10.2 percent from a year ago. Condo sales are also up in the county with a 22.9 percent increase from a year ago and the median sales price was up 26.9 percent. Another piece of this steady improvement is the inventory of homes which continues to drop. May showed a 4.7 month supply compared to April’s 5.1 percent.
Nationally on average the market is also looking better, with sales improving 9.6 percent from May of last year to May of this year. However, economists point out that the May 2012 sales were actually down 1.5 percent from April 2012, reinforcing the feeling that although we have some recovery it is still fragile and well below what is considered healthy levels.
And let’s not forget the mortgage rates which keep hitting all time lows. Mortgage rates track the yield on the 10-year Treasury note which may be good for home buyers but bad for our economy. As of this writing the average rate for a 30-year fixed mortgage was 3.66 percent and for a 15-year mortgage was 2.95 percent. Since December the 30-year mortgage rate has been consistently below 4 percent.
So while the real estate markets are recovering in isolated pockets around the country we have to be grateful that we’re in one of those recovery pockets. I’m not sure who originally coined the term “Location, location, location” when referring to real estate - many give credit to Lord Harold Samuel a British real estate tycoon - but it doesn’t really matter who first said it because as clichés go, it is definitely one of the best.