Some people will not accept the fact that our economy is getting better, especially as it relates to the real estate market. No matter how good the news may be, the nay sayers will always find a way to add the proverbial "but", to try and discredit the good news. The housing market has been improving for at least the last six months, but still many potential buyers refuse to believe it. They are so psychologically invested in their view that the real estate market has not yet hit bottom they refuse to believe anything that might require them to change their view. This is not only stupid it works against their own best interest, if they wait until all the lights are green, when its 100% completely safe to venture out they will have missed real opportunities that are currently available.
Now I dont want to seem like I'm a Polly Anna, seeing only the good and not the bad news because there is both. However this is nothing new, good and bad news go together, you cant have one without the other. What is important is to use both the good and bad news to your advantage. Be alert, ready to pounce when you see a good real estate deal. OK you say " How will I know what a good deal is" I say by staying informed, read both the good news and bad and try to determine which there is more of, the good or bad and whether or not you see a trend developing that is worth keeping track of.
For Instance:
According to the National Home Builders Association"The apartment and condo sector continues to be a bright spot in the housing market, with the overall index at its highest level in six years," says David Crowe, NAHB’s chief economist."
The Associations Multi Family production Index has reached its highest reading since 2005. Now as bad as some people might think things are this has to be seen as good news for Condominium owners because demand has been rising, which means the inventory of re sale condominiums is falling and as previously posted prices will or have already began to stabilize. So IMO that is good news worth remembering.
Concerning the economy:
According to February Fannie Mae's National Housing Survey, consumers are feeling better then they have in several years, seeing the job market is improving with employment increasing, the unemployment rate has been falling and consumer confidence has been rising as it relates to the housing industry and the economy. All in all improving consumer confidence will result in the potential for continued economic upside which will result in improvement in all the underlying numbers, self for-filling prophecies.
Where are housing prices going
According to Core-logic "Although home price declines are slowly improving and not far from the bottom, home prices are down to nearly the same levels as 10 years ago," said Mark Fleming, chief economist for CoreLogic."
So while homes prices on average are still falling they are falling less then in the past and are near bottom. While some states have seen excellent home price appreciation in January including South Dakota, where prices rose 5.7%, North Dakota (up 4%), West Virginia (up 4%), Montana (up 3.6%) and Michigan (up 3%). There were some with the deepest price depreciation included Illinois with a drop of 8.7%, Nevada (down 8%), Delaware (7.9%), Alabama (7.7%), and Georgia (7.5%).
So some states were up big and some down big but unless you own property there what does it matter to you. All you should be concerned about is how the state you own property in is doing. Interesting that we dont see Florida listed in the best and worst listed, that to me is great news. Why? Because Florida has been hit very hard by this recession, our housing market was crushed more so then others. So not being listed on the bottom means we are heading for the top and that is exciting news. Florida has been one the poster states for "Housing depreciation" with plenty of horror stories but that narrative is changing and in a very good way. Our resale housing inventory is down more then 50% in the past three years, deeply discounted distress sales are getting harder to find and when you do they get multiple offers and often end up higher then the asking price. New construction activity in Palm Beach County is on the rise, it was dead not to long ago but now you see more and more pockets of single and multi family home construction, commercial construction and commercial property renovations. While it is by no means what it was prior to 2006, its getting better every day.
Adding to the good news is that local Palm Beach County municipalities are seeing signs of improvement with moderate increases in tax revenue collected and increasing. Since these municipalities are financed primarily through the real estate tax revenue they collect it can only mean they see real estate values are stabilizing and in some areas improving. Depending on who you speak to the complete turn around of housing could be anywhere form 2-5 years away. So while we may be at or near the bottom dont expect to see a quick turn around, that may take a few more years. However once the turnaround has been made, reduced inventory and increasing demand will result in price appreciation on those homes priced to the market.
JUST IN from Florida Realtors:
CHICAGO – March 16, 2012 – Recent economic and real estate factors indicate that most of the Sunbelt geographies have already hit their cyclical lows and during the next six to 12 months are likely to surpass national growth rates, according to a special office report issued by Jones Lang LaSalle, a global financial and professional services firm specializing in real estate.
Although nearly all areas of the U.S. were negatively impacted by the recession, some of the hardest hit were the Sunbelt markets of Fort Lauderdale, Jacksonville, Las Vegas, Los Angeles, Miami, Orange County (Calif.), Orlando, Phoenix, San Diego, Tampa and West Palm Beach.
“The Sunbelt markets witnessed substantial drops in their overall economies in 2007-2009 with relatively no recovery in 2010-2011,” said John Sikaitis, senior vice president of research at Jones Lang LaSalle. “However, despite ongoing negative perceptions, most of these markets are undergoing a resurgence and poised for dramatic changes in 2012 and beyond. These economic upswings bring much optimism for future office and employment levels, as well as investor interest for the capital markets.”
Thought this was relevant because it listed West Palm Beach as one of the Sunbelt markets that is rebounding. Remember all that matters is what is happening in your market and so to hear that our market is poised for dramatic changes is very good news indeed.
