Like politics, all real estate is local
The late Speaker of the House, Tip O'Neill, is famous for saying all politics is local, meaning it doesn't matter what happens in Seattle if you live in Florida. The real estate culture has since adopted this philosophy and applied it to real estate, which, in our world, means it doesn't matter what happens in Cape Coral if you live on Anna Maria.
During a recent trip to Key West a relative of mine from New York who works in finance e-mailed me a CNN Money report titled "Nearly 20 Percent of Florida Homes are Vacant." The news piece was accompanied by his editorial comments indicating he knew it was bad but he didn't think it was that bad. Before I had a chance to carefully read the article, I answered him back not to believe everything he reads and that all real estate is local, asked him how deep the snow was in New York and then went straight back to my glass of Pinot Grigio.
When I finally found the time to do a careful read of the article, I was as horrified as my financial wiz in New York. Even I started thinking am I missing something? There aren't too many vacant properties around here; in fact I would be hard pressed to tell you where one is.
Nevertheless, CNN Money outlined the following facts:
The Census Bureau reported that 18 percent or 1.6 million of Florida's homes are sitting vacant, more than a 63 percent increase during the past 10 years.
The home vacancy rate is worse in Florida than in any of the other bubble real estate markets. California has only 8 percent vacant; Nevada has 18 percent even though they have the highest foreclosure rate in the country, and Arizona an 18 percent vacancy rate.
Also reported by the Census Bureau is that the population of Florida has slowed in the second half of the last decade to 5.7 percent which could further negatively impact the vacancy rates. However, Florida's growth overall was 18 percent starting in 2000.
The housing analysts are taking this information and predicting that the Florida housing market will take years to recover, some areas as much as 20 years. Celia Chen, a housing market analyst for Moody's, is also saying that prices in Florida will fall further and not hit bottom until mid-2012.
Well here's where we get back to the all real estate is local theory. As depressing as these numbers sound, and, make no mistake, Florida real estate has a lot of challenges, Manatee County and specifically Anna Maria Island are experiencing a very healthy sales market. The Bradenton-Sarasota sales rates during February rose for both single family homes to almost 20 percent and condo sales increased 26 percent over February of last year, and despite what the CNN report said, sales in the entire state rose in February outpacing the nation.
The story here is that first time buyers are getting in the market benefitting from a combination of low interest rates and low prices, and investors are also starting to see opportunities believing that the market is nearing the bottom.
When we asked our friends how they liked Key West, they said it was really nice and they were glad they saw it, but Anna Maria was really a lot nicer. Based on the traffic on the Island this season, they're not the only ones who feel that way. All real estate is local, you better believe it, just ask anyone on the beach if you can get over the bridge.