Inventory decreases, buyer activity increases
If you're reading this in a reclined position on the soft Anna Maria sand with just the hint of a Gulf breeze tickling your face, it may be time to get out the cell phone and call your favorite island real estate broker.
A lot of buyers around the country have taken the wait and see attitude about buying real estate. Most of them felt that when the real estate train starts to leave the station there will still be plenty of time to hop on board before prices are affected. Frankly I thought the same thing, but there are signs out there that the train is moving faster than anyone thought.
One of the major indicators is that last month analysts at Bank of America-Merrill Lynch revised their home-price forecast, calling for a bottom in 2012 instead of 2013. Another positive indicator that speaks to our local market is two major retail projects being built on the west side of Bradenton. Marshalls clothing store on Cortez Road and Fresh Market, an upscale grocer, on Manatee Avenue, both scheduled to open late summer or early fall.
Real estate brokers around the country are all complaining about the same thing, lack of inventory from a year ago. This could partly be because would be sellers are waiting for prices to level off. In addition, mortgage applications are falling nationally, indicating there are still a lot of cash buyers in the market. I can personally attest to this lack of inventory since during the past three weeks I have been helping family members looking for a second home in Bradenton and was astounded at the reduced inventory compared to what had been available not that long ago.
Nationally, as reported by Standard & Poor's/Case-Shiller index, prices in January dropped 0.8 percent in the three month period that ended in January. Case-Shiller tracks 20 U.S. metro areas and is a trailing index since it reflects sales that were booked in the prior three months. However, compared with one year ago where home prices fell 3.8 percent during January and 4.1 percent in December 2011, the improvement is encouraging.
Locally, Manatee County, according to the Manatee Association of Realtors, reports 317 existing single family homes sales in February, a 7 percent increase from January, but a 4 percent decline from February of last year. The county's median price in February was $175,000, which was up 9 percent from January and 13 percent from February of last year. Sarasota is also experiencing increased sales in single family homes with an 11-month high of pending sales.
On Anna Maria, local brokers are confirming what is going on around the country and the county with a shortage of inventory and a lot of buyer activity. Just take a good look at property asking prices advertised in this publication. Some of these price points haven't been seen in four or five years.
Never-the-less, the housing market is not out of the woods. There are still almost 11 million homeowners who owe more on their mortgages than their houses or apartments are worth. There is still a significant shadow inventory of potential foreclosures that could come on the market this year, which would put pressure on prices. In addition, credit standards continue to be tight leaving the market with fewer buyers.
Sorry if I ruined your beach day, but I can guarantee you'll eventually thank me. It's time to get out of the beach chair, get out the checkbook and flex your real estate muscles before they go soft.