Market Update...

6/16/09  What’s the difference between my market update and what you hear in the media? I report the GOOD NEWS as well as the not so good, and back it up with factual data pertaining to our LOCAL market. The truth is that although St. John’s County sales are down about 18% year to date, the market in many areas in St. Augustine is HOT HOT HOT! I just listed a short sale in St. Augustine South for $99,900 and had 5 showings and a full price offer in the first 24 hours on the market!

    Neighborhoods closer to the shoreline are seeing dramatic increases in sales activity vs. last year, as investors and deal seekers are gobbling up great opportunities as soon as they hit the market – this is called pent up demand – they’ve been sitting on the fence waiting for the opportunity and perfect timing – and now they see it and they’re buying like mad. Anastasia Island, for example, is up 14%, St. Augustine Shores is up 24%, and St. Augustine South is up 40% YTD over last year’s YTD sales! Additionally, these areas have seen positive monthly growth for several consecutive months, indicating that we've hit the bottom from a demand perspective.  Pending home sales are strong in these areas, so the goodness should continue. The best news is that the low end of the pricing range in each neighborhood should hold or even increase, since those homes priced at the low end are being gobbled up. Positive cash flow investment opportunities exist, and no investor with the means is going to allow cash to sit on the table – so they’re buying these opportunities quickly. Pricing is unbelievable, and with the Federal First Time Home Buyer Tax Credit incentive of $8,000, record low interest rates, and sellers offering amazing terms to spark a sale, buyers are jumping in. There is great wealth to be made by purchasing in this market. Short sales and foreclosures are making up 30-50% of the sales in many areas, so those buyers with patience or less specific criteria on location / home type are scoring big. If you’ve thought about buying vs. renting, making an investment, or upgrading your existing home, the time to buy is NOW. The rental market for investors is great – there are tons of people on hard times, having recently lost their home, or had to take a lesser paying job, that can no longer get a mortgage because of the effect the economy has had on their credit. I’m having no problem securing tenants, and I just raised my rent! Contrary to what the folks selling advertising space are saying, it’s not all gloom and doom out there. If you’d like more information specific to a particular area of interest, please feel free to contact me for the facts, anytime.

10-13-08 - Great End To 3rd Quarter 2008!  My belief that St. John's County sales numbers would improve as the year comes to an end was substantiated in Sept., as home sales in the county were only 7% below last September's sales as compared to the negative 20-40% sales numbers we had been seeing.  I remain confident that as we close out the year, we very well may see the sales numbers begin to exceed last years levels, which would be very welcome news.  Additionally, local sub markets are coming on STRONG...Anastasia Island projecting sales growth to be flat to 2007, St. Augustine Shores 3rd quarter was UP 54%, and projecting to finish UP 18% for the year, and St. Augustine South 3rd Quarter was UP 33%, and is projecting to be about flat for the year (after months of very low sales, comparatively).  Builders continue to be creative and offer very aggressive promotions to sell new homes and buyers are showing that they can't resist the fantastic deals.  Foreclosures and short sales are selling strongly as well, and as they wash out of the market, conventional re-sellers will regain ground.  I continue to hope that the new administration will do more to prevent foreclosures / short sales to come, as there are still many people who's rates have not yet reset and who's mortgages will become unaffordable given the historically weak economic and lending environment.  Be sure to get out and vote!

9-5-08 August sales on Anastasia Island were up 33% from August 2007!  St. Augustine Shores had its second growth month in a row, and was up 18% over '07 and St. Augustine South posted its second growth month in a row as well!  County wide sales are still well off from last year (about 26%) but I maintain that this will continue to improve as new construction comes out of the ground and closes.

   07-15-08:  With the first half of 2008 behind us, and the data on the table, I'm going to do it.  I'm calling it!  WE'VE HIT THE BOTTOM and I believe we can anticipate growth for the second half of 2008.  Here's what I see, and why I say that:

The differences between this years and last years sales numbers are getting smaller.  For example, Q1 was 30% behind last year, but Q2 was only 20% below last years sales.

Micro Markets, like Anastasia Island where there's not much new construction (which delays closings) have posted 1 flat and 2 growth months compared to last year.  We're only 10% below last year's closings for the first half of 2008.  St. Augustine Shores is only 2% below last years sales for the first half of 2008.

Although for the first half of 2008, St. Johns County residential home sales are about 24% below that of 2007, that's DOWN from particular months that were running 30 and 35% below last year.  My hypothesis is that the majority of buyers are buying NEW construction, which is in the building phase now, and will close in the second half of the year, and we'll see the data stabilize and possibly even post growth over 07.  The builders have listened and the deals are too good to pass up.  Not to mention the foreclosures are shaking out from the mortgage crisis and are being snatched up by savvy investors.  The median price for Q2 also GREW 3% to $239,900.

IT'S A GREAT TIME TO BUY IN FLORIDA! ! !

02-01-08:  HAPPY NEW YEAR!  Contrary to every media report you hear these days, it's NOT all doom and gloom in our local real estate market!  Remember, the media wants your attention so they can sell advertising, and to get it, they have to provide DRAMATIC news.  Did you ever notice how they never report on the market when it's chugging along at it's normal pace, or only mildly up or down?  It's either "The Best, or The Worst ______ in ____ years"  I'd like to shed some FACTS about our local market in St. Augustine, to balance out the drama.  Please visit this area regularly for an updated pulse on YOUR St. Augustine real estate market!

1.  Yes, sales are down significantly as compared to prior years in St. Augustine, but you must remember that the last few years were the best it's EVER been!  Look at the graph below, our resale activity is approximately what it was in 2000, which was the beginning of our BOOM years!  Supply and demand are out of balance for the time being, driving prices down, but real estate activity in St. Augustine is still at moderate levels, in my opinion. I continue to hear of strong sales activity in new communities where pricing is excellent, and see properly priced resale homes sell in 2-4 months.

2.  St. Augustine's economy has been heavily, if not primarily, driven by the real estate industry.  Therefore, we've had upwards of 1400++ active real estate agents, who, to speak frankly, got spoiled.  It was easy for "hobby agents" to make a living or just extra money on the side selling real estate.  There was so much demand, as compared to the limited inventory, they didn't have to worry about much marketing or providing excellent service to generate referrals in order to be successful.  Well, now that demand has softened, and you have to work to make a living, those who were not prepared will tell you that the market is terrible...read in...FOR THEM.  I, personally am on track to meet or beat my own individual performance goals, which are consistent with or better than than my early years in the boom.  The supply of homes is not the only thing out of balance...so is the supply of licensed real estate agents at 1311 active agents in St. Johns County.  Therefore, when you ask how the market is....be careful who you're asking.

3.  Mortgage interest rates are still at historical 50 year lows and the FED recently adjusted rates 2 x in one month!  See the graph below.

4.  Buyers have more choices and seller concessions at every price point than I've seen in years!  Sellers are bending over backwards to make a deal, and prices have returned to PRE-2004 levels.  A few years ago, $180,000 barely bought you a very modest home in The Shores, whereas today, that buys a brand new 3/2 with garage, and luxurious upgrades like granite counters, crown moulding, tile or wood floors, etc....IT'S AN INCREDIBLE TIME TO BUY IN ST. AUGUSTINE!    

5.  Certain sub-markets (Anastasia Island, etc.) are showing signs that they've reached the bottom, and actually outperformed 2005 sales in a given month or quarter...we're gaining ground!  Other resale markets like The Shores or The South are struggling to make sales as they compete with new construction on the US 1 corridor -- those areas will end the year about 25-30% down in the number of sales from last year.  This may be bad news for sellers who haven't been in their homes long, but this will soften prices and stimulate buyer activity to help reach stabilization.

6.  Many loan products that had disappeared recently from the market, are making their way back in.  Buyers are beginning to see more options, such as "no doc" or Alt-A loans.  Many times, the credit scores needed for these products is higher than it used to be, but I think that's a good thing if we want to avoid another sub-prime collapse.

7.  Our property tax system is broken, and lawmakers know it.  Admitting you have a problem is the first step to recovery.  Amendment 1 PASSED adding additional benefits to property owners to reduce taxes.  We'll now enjoy a $50,000 homestead exemption, 10% annual cap on taxable values of non-homesteaded property, and portability of our tax savings when we move to a new homestead property.  Property taxes and insurance rate reform are the biggest issues on adjenda this year, and Florida legislators are working diligently to propose intelligent reform for ALL property owners.  Let your voices be heard and encourage your government to pass laws fair for EVERYONE, including investors and vacation homeowners, who drive our real estate economy as much as, if not more than homesteaded local residents.

8.  Finally, real estate appreciation / depreciation should be considered over the long term, like other investments.  If you study real estate values over the long term, you'll see that Florida real estate has historically outperformed almost every other state in the nation.  Over the last 27 years, Florida has averaged 14.25% annually or 385% appreciation in total!!  Compared to a national average of 11.44% annually, that's an EXCELLENT return. Florida ranks #12 in the United States in appreciation since 1980, and #3 over the past 5 years!  (Data Source: Office of Federal Housing Enterprise Oversight Report, Aug. 30th, 2007)  I don't know about you, but buying real estate in Florida has been the best decision my family has ever made.

 10-24-07: Also, I find this bit of commentary too important to leave out....Last night I saw a program where Donald Trump, you know, the most successful and richest real estate professional in the world, was asked a series of questions regarding the current market, and to paraphrase, his responses on our market conditions and timing were...

 DID YOU KNOW???

According to reports published by the Office of Federal Housing Enterprise Oversight...

1.  In terms of home price appreciation, FLORIDA ranks 12th in the nation since 1980 at an average of 14.25% annual appreciation.  Florida ranks 3rd in the nation over the last 5 years at an average of 19.06% annual appreciation!

2.  The NATIONAL AVERAGE home price appreciation since 1980 is 309% or an annual average of 11.44%!