Housing market remains anemic
With the new school session in full swing and Labor Day also in our rear view mirror, Manatee County students and residents are starting to clear the sand out of their brains and get back down to the business of business. But the real estate market hasn’t quite shaken the Gulf beach sand out of its brain and the hope of double digit appreciation rates may also be in the rear view mirror.
The economy of the country is flat; it’s a little better than last year and the unemployment rate is coming down somewhat. However, the average American still isn’t comfortable with their flat incomes and poor job choices which keep them from making big ticket purchases like new homes. It doesn’t take Wharton School of Business alumni to figure out that instead of moving up, we’re moving horizontal, which is having an effect on the national real estate market.
The second quarter appreciation comparisons show a weak 4.4 percent appreciation rate compared to last year nationally. The top of the 25 metro areas analyzed by the National Association of Realtors was the Atlanta region appreciating 16 percent over last year and the bottom was the Baltimore region with a negative 2.7 percent appreciation. In fact the end of the second quarter resulted in the slowest annual pace since 2012, with only 19 areas reporting double digit year-over-year price increases.
In Florida, Orlando was 13 percent; Miami-Fort Lauderdale 7.6 percent and Tampa-St. Petersburg-Clearwater 1.3 percent. The better news is that the Manatee-Sarasota region rose 7.5 percent for the second quarter over last year. In addition, the statewide appreciation rate was 5.3 percent leaving both Manatee-Sarasota and Florida overall with a substantially better appreciation rate than the national average.
Economists have concluded that the slow rate of housing appreciation is a combination of consumers who are more cautious as well as an increase in available inventory. Even investors have pulled back with the foreclosure market topping out and housing prices going up last year.
Florida and Manatee County may be in a better position than some regions around the country and better than the country on average. But don’t forget that Florida is basically a transient state and most residents came from somewhere else. Market activity all over the country has a substantial effect on future residents of Florida.
Naturally when appreciation slows down it’s a great time for buyers to swoop in especially in view of the fact that interest rates could go up next year. There are some great buying opportunities available all over the country for buyers and plenty in Florida. As previously mentioned, home financing restrictions are starting to lift slightly so if you’re thinking about taking the leap and you qualify for home financing it’s a good time.
In spite of great press recently about how fabulous the Manatee-Sarasota region is to live in, overall our appreciation rate is still a little anemic compared to what we anticipated. That’s not to say there aren’t pockets that are robust; Longboat Key, parts of Anna Maria Island and certainly Sarasota’s waterfront are all appreciating at a quick pace. But when you average in other parts of the two counties it looks like we’ve “settled” rather than “excelled” and settling is something no one “appreciates.”