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Vol. 15 No. 13 - January 21, 2015

REAL ESTATE

Into the spin zone

 

It’s all about the spin, whether you’re talking about politics, negotiating with your 14-year-old about appropriate school clothes or analyzing real estate sales numbers. If the facts don’t support your argument, just give it a little nudge into the spin zone.

According to recent statists, the U.S. housing market has not delivered the lift to the economy during the past year that economists predicted. According to the Standard & Poor’s/Case-Shiller home price report released the last week in December prices nationwide increased only 4.6 percent for the year that ended October 2014. This was down from 4.8 percent in September and far below the 10 percent plus gains that we were seeing in the first quarter of the year. Also, the National Association of Realtors estimates that 2014 sales will ultimately end up below the 2013 level, the obvious wrong direction.

However, many economists, including Stan Humphries, the chief economists of the real estate data firm Zillow, indicated that slower price growth should be helpful down the road for the economy. When prices of homes rise at levels closer to wages, more people are usually able to buy homes.

He goes on to say, “A slower moving housing market is inherently more stable, more balanced between buyers and sellers and more sustainable over the long term.”

The spin doctors feel that the slowing trend is positive for this year’s housing market, indicating that price appreciation of about 5 percent is closer to a “sweet spot” where more buyers are able to purchase a home and current owners can still accumulate housing wealth. This balance will presumably avoid a price bubble triggering a financial crisis similar to the one in 2007. In addition, those in the economic know feel that 5 percent appreciation is a healthier market, encouraging first time buyers who are frequently uncomfortable with sharply escalating appreciation rates.

Spin or not, I’m actually OK with a modest 5 percent appreciation rate. I agree that a slower moving marketplace is healthier and does not allow for the frenzy that home buyers were subjected to when prices hit their peak in 2006. After 2006 home prices nationwide fell almost one third before they began to rebound in February 2012, rising almost 25 percent through October of 2014, according to the Standard & Poor’s/Case-Shiller index.

So a leveling off of pricing combined with still very low interest rates, the end of December hit a 3.83 percent rate for a 30-year, fixed-rate mortgage, will provide affordability to many buyers. According to the National Association of Realtors, during 2014 first time buyers only accorded for 29 percent of existing home sales. This is less than the historical norm of 40 percent. Therefore, getting new blood in the market is essential, so that existing homeowners are able to sell their property and move on or up keeping the cycle going.

Never-the-less all real estate is local, and what’s happening in and around major cities may not be what more rural areas are experiencing. The Standard & Poor’s/Case Shiller index, which analyzes 20 cities and regions around the country places the Tampa region at a 6.17 percent appreciation rate from October 2013 to October 2014.

Rose colored glasses aside, we should all be happy with sale prices moderating slightly. As I’ve said before in this column, the housing market we’re experiencing now feels more solid and lasting than 10 years ago. That’s my spin, and I’m sticking to it.

Real Estate Transactions
November 2014

Sponsored by Alan Galletto Island Real Estate

Sold Date | List Price | Sold Price | Address | Provision | Property Style

Anna Maria

11/21/2014 529,000 500,000 714 Gladiolus St. 987 50x1002 2 Br/2 Ba SFR
11/14/2014 674,900 632,500 236 Gladiolus St. 1361 2 Br/2 Ba SFR
11/18/2014 720,000 680,000 208 Palmetto Ave. 1232 2 Br/2 Ba SFR
11/14/2014 789,000 750,000 120 Oak Ave. 1429 50.0x110.0 4 Br/2.5 Ba SFR
11/14/2014 240,000 220,000 522 Pine Ave. 8a 822 2 Br/1 Ba Condo

Bradenton Beach

11/14/2014 219,000 205,000 204 Church Ave. #9 590 2 Br/1 Ba Condo
11/21/2014 619,900 600,000 107 10th St. N. 2020 3 Br/2.5 Ba Condo
11/26/2014 619,900 600,000 109 10th St. N. 2020 3 Br/2.5 Ba Condo
11/21/2014 142,900 138,500 117 7th St. N. # 7 594 1 Br/1 Ba Condo
1/12/2014 495,000 475,000 241 17th St. 1676 3 Br/2.5 Ba Condo
11/28/2014 295,000 287,500 2212 Ave C 50x105 Vac

Cortez

11/11/2014 699,000 699,000 12326 BayPointe Ter. 2565 3 Br/2.5 Ba SFR
11/19/2014 869,900 845,000 12918 Yacht Club Pl. 3270 4 Br/2.5 Ba, REO / Bank Owned
11/18/2014 649,000 600,500 3840 Mariners W. 526c 2547 3 Br/2.5 Ba Condo
11/21/2014 79,000 73,000 12305 BayPointe Ter. 83x186x117x149 Vac

Holmes Beach

11/26/2014 369,000 355,000 5604 Guava St. 1545 57x105
11/21/2014 449,000 449,000 8316 Marina Dr. 1440 3 Br/2 Ba SFR
11/18/2014 799,000 770,650 525 Key Royale Dr. 1788 3 Br/3 Ba SFR
11/13/2014 1,079,000 980,000 207 73rd St. 2038 4 Br/3 Ba SFR
11/26/2014 1,199,000 1,170,000 628 Key Royale Dr. 4800 100.0x160.0 4 Br/4.3 Ba SFR
11/14/2014 495,000 495,000 8106 Gulf Dr. # A & B 1600 59x115x58x105 Duplex
11/04/2014 299,900 289,000 409 63rd St. 1400 3 Br/2 Ba, 1/2 Duplex
11/20/2014 274,900 275,000 18 Seaside Ct. # 18 978 2 Br/2 Ba Condo
11/07/2014 399,000 380,000 5608 Gulf Dr. 204 1092 2 Br/2 Ba Condo
11/26/2014 525,000 500,000 5400 Gulf Dr. # 34 1188 2 Br/2 Ba Condo

Source: Mid Florida Multiple Listing Service


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