Understandably, economists are extremely interested in the “health” of the housing industry. Our homes represent a significant portion of the wealth of our nation. Stability, marketability, and steadily growing values of homes is as key in the economic mix as growing employment, retail sales, and a sound stock market.
Recently, we have been receiving mixed messages on the health of the housing market. A lot depends on where we live. Nationally, home sales were up almost 23% from a year ago, but concerns remain due to expiration of the tax credit programs. Nationally, home prices were up 4% from a year ago. However, inventory levels of homes for sale remain above normal.
Locally, the statistics have been relatively strong in Naples, Bonita Springs, and Estero this spring compared to a year ago. The Boeglin Team meets daily with both buyers and sellers. We feel that our “ground zero” perspective goes beyond the statistics. What is our current view of the market?
- We meet a lot of interested buyers who have been “kicking tires” for awhile. Among the serious buyers, we see more of a sense of urgency than we’ve seen for a long time. There seems to be a fear that this “bottom” is going to get away from them; that mortgage rates are not going to remain at these historically low levels; that there are fewer desirable homes from which to choose.
- Sellers are digging in their heels. They’ve seen their home values drop by 50% or more in the past few years, and see better days ahead. Unless their home is a distress sale, or their personal circumstances demand a sale, many homeowners are getting downright stubborn.
- Single family home prices have clearly stabilized in the past 15 to 18 months. The declines that began 5 years ago have stopped. With very little new building going on, there seems to be a balance in the supply and demand equation.
- Condominium prices continue to drift a bit, with signs that prices are in the process of stabilizing. A combination of financing complexities peculiar to condominiums and an overabundance of investor-owned condos has presented ongoing issues in this market. We expect this market to rebound soon—perhaps before the end of the year. Buyer interest in the condo market appears to be growing in our area.
It has been a long, difficult road for homeowners in Southwest Florida. It has also been a unique opportunity for buyers to come into the market at extremely affordable price levels. If history is any indication, times are changing.