December 2010 Real Estate Newsletter ALAN GALLETTO, Realtor; Anna Maria Island, FL.
December NEWSLETTER 2010
The number of sales on the island continue to be strong with sales up 42% for November 2010 at 27 (SF-16, Con-7, Dup-2 & Lot-2) compared to sales in November 2009 at 19 (SF-9, Con-8, Dup-1 & Lot-1). Year-to-date sales through November 30, 2010 continues to stay well ahead of last year, up 36% at 281 (SF-165, Con-80, Dup-22 & Lot-14) compared to November 30, 2009 Y-T-D at 206 (SF-106, Con-80, Dup-8 & Lot-12). Pended sales (properties under contract) continue to be strong at 57 (SF-32, Con-19, Dup-3 & Lot-3) equaling last month’s 57 which continues to bode well for sales in the next couple months. The normal distribution of sales in the past has been 75% under $800K and 25% over $800K. Over the last two years the distribution has been more skewed to the low end with 94% of sales under $800K and 6% over $800K. This distribution tends to understate the average and median home sales when comparing to previous years. Island Real Estate also continued its strong performance in November with 7 contracts closed and 12 new contracts.
Inventory continues to slowly move down to the normal range (450-500) with it currently at 516 (SF-256, Con-174, Dup-34 & Lot-52) compared to 521 last month. Distressed properties (short sales & bank owned) continue to decline and are currently at 30 (SF-13, Con-12, Dup-4 & Lot-1) down from 37 in September and 43 in August. Distressed properties on the island are currently running at about 5% of the inventory which is extremely low compared to other markets. As this number moves to zero we will be positioned to see an uptick in average and median sale prices.
Two more units at Palm Isle Village have closed, 3215 Gulf Dr at $331,000 and 3209 Gulf Dr at $475,000, that is 7 sold and only 4 left. This month in Frank & Al’s Great Buy’s I have highlighted properties that are not only great buy’s but either have a great rental history or with a little modification would be very good rentals. Since most buyer’s of property on the island are buying second homes, if the property can rent well it can pay the operating expenses and leave some left over to help pay the mortgage. Most properties, because of location and the type of property it is, have trouble paying the operating expenses let alone covering any of the mortgage. So, you not only need a good buy, but a property that is located and has the amenities to maximize rentals. This month we have recommended five properties that meet those criteria. Palm Isle Village unit 8 (3204 6th Ave) has a three and a half year rental record of doing $29,000 + in gross revenue. Starfish Beach unit 1 (2915 Ave E) has a four year history of rentals in the $33,000 range. The other three properties (787 Jacaranda, 704 Rose and 612 N Bay Blvd) are great buy’s in great rental locations and with minor improvements would be very good rentals. If you’re looking for a lot, the lowest priced canal lot on the island is still 718 Key Royale Drive.
Since last month interest rates have been slowly creeping up. Currently conforming (up to $417,000) 30 year fixed loans are at about 5% with conforming 15 year fixed at 4.6%. Six weeks ago 30 year conforming loans were under 4%. Even though we’re seeing rates creep up they are still at all time lows and no one’s predicting that they will be going up significantly any time soon. If you are shopping around for financing in the area I would recommend you talk to Wayne Gunter at BB&T Bank (941-720-6820), Russ Dozeman at Regions Bank (941-726-1319 or Susan Tyson at Wells Fargo (941-809-3802). They have all worked with some of my clients this year.
To summarize, since the prices have adjusted down to the current market from the peak at the end of 2005, all the indicators show a very healthy island market. The inventory is just about down to normal levels, the number of distressed properties is at an all time low and sales on the island are the highest since the peak year of 2005. Although there aren’t many steals left on the island there are many very good values at market price with great rental capability.