Buyers and Sellers in a Bizarre Market
Most people agree that this is the most unusual real estate market in recent history. Most would say buyers have all the power, but believe it or not, some areas have made a recent transition back to a seller's market. Whichever way you look at it, it's a quickly changing market...especially when you look at some recent statistics.
After 14 months of year-to-year increase in existing home sales in Florida, October 2009 showed a 45% increase compared to October 2008; that's 15,160 sold last month versus 10,444 sold a year ago in the same month. The median home price also decreased year-to-year by 17%, which is no doubt a cause of the increase in sales.
One reason for the lowering of home prices is the number of foreclosures and short sales in the Florida market. In the third quarter of 2009, one in five homes were in some stage of foreclosure - somewhere between 90 days late on payments and being bank owned. These homes tend to sell below market value, bringing the average sale price and the value of neighboring homes down. 1 in 5: Florida leads the nation with this number.
Some say this upcoming flood of bank owned homes will further lower median home values. Others have faith that the banks will release these homes for sale slowly, therefore keeping the values up, benefitting current home owners and the banks.
Sales are up 45%, yet foreclosures show no sign of stopping. So is this a buyer's or seller's market? In Palm Beach County, and likely statewide and nationwide, it seems to really depend on which neighborhood you're dealing with. From a Realtor's perspective, the inventory in neighborhoods like Abacoa in Jupiter, FL, has gone dramatically down since this time last year. Where before I had a hard time narrowing down what to show buyers, I now have a hard time finding enough to show.
If you are in a position to buy, go for it. Rates are historically low and FHA government lending programs require very little money down, if any. Though prices may dip slightly lower, rates could also go up, negating the lower prices.
If you're thinking about selling, you may want to consider that home prices, in most cases, will not be going up any time soon. If you don't have several years to wait it out, then selling now might be your best option. Though you might lose on the sale of your home, you will gain when taking advantage of the new lower sale prices when you purchase.