Posts tagged City of Anna Maria Realtor

Sales for the month of July were down about 25% from 2008 with 15 properties closed (SF-9, Con-5, Dup-0 & Lot-1) compared to 20 closed in July of 2008 (SF-9, Con-6, Dup-4 & Lot-1) although a little higher than July 2007 (12) and July 2006 (13).  As you can see from the charts below sales this year continue to run about 24% lower than last year with July 2009 Y-T-D at 122 versus 161 for July 2008 Y-T-D.  Again this month, comparing the last full 12 months sales to the 12 months ending in December 2008, average and median sale prices are down for single family and condos but holding steady for duplex’s and lot’s.  Pending properties (properties under contract) continue to be very strong at 52 (SF-29, Con-20, Dup-2 & Lot-1).

There continues to be good signs in the market, distressed properties (short sales, pre-foreclosures, in-foreclosure & bank owned) continue to remain low at under 5% of the inventory.  The inventory continues to decline with 535 properties for sale on the island (SF-270, Con-183, Dup-39 & Lot-43) compared to 548 last month.  The optimum number we’re looking to get to for normal inventory is in the high 400’s and we’re approaching that now.

Rentals have been up significantly this year.  Last year was a very good year for rentals and we’re up 20% over last year.  The summer season (Florida drive market and surrounding states) has been particularly strong.  We think it’s because many people, looking to economize, have decided to drive to the beach rather than get on a plane.  Another is all of the good press the island has been getting in national and international publications.  The latest being the travel section of the New York Times.  A recent addition to our rental team is Michael Lesnick who recently joined us as operations manager.  Michael reports to Larry Chatt and will be responsible for quality assurance on the rental side of the business.  He will be working to improve the quality of the cleaners and vendors who do work on our owners properties as well as the services that our guests use when staying at one of our properties.  The team is very excited because no other rental company on the island has a dedicated manager responsible for quality assurance.

I mentioned in the last several newsletters that, with prices at rock bottom and interest rates at 40 year lows, there won’t be a better time to buy.  I found a graphic that does a good job of graphically demonstrating this point.  See on my website alan@alangaletto.com to see the 30 year fixed mortgage rate chart from 1972 to 2009…..WOW.  Also check out the chart showing the principal and interest payment on $200,000 over that same period of time.  I think you’ll see what the interest rate does to your buying power and your pocket book.

Apply those low interest rates to one of Frank & Al’s Great Buys.  The short sale on 312 64th St the large half a duplex condo with a common pool has more square footage then most homes on the island and the price has just been reduced to $329,000.  Who knows what the bank will let it go for.  The two unit condo unit at 202 38th St is a bank approved short sale and bigger than most single family homes on the island.  At 2500 sq ft this condo unit has no common area and priced at a lower price per sq ft then any condo’s currently sold with a gulf view.  Check it out at $775,000.

To summarize the island market, the inventory continues to fall and that’s very good.  The number of sales are lagging behind 2008 but on par for 2007.  The banks continue to be difficult to deal with in approving loans.  They have loosened up their rules in dealing with appraisers, due to the government allowing them a little more flexibility, but appraisals are still knuckle biter’s because of the distressed sales in the market.  Loans on condo’s are requiring 25% down and the associations are getting a lot of scrutiny.  Associations without reserve funds at about 10% of the annual budget are hard pressed to get loans approved in their complex.  As far as condo motels are concerned, there is no financing because banks will not touch them at this time.  When we look back on this year I expect 2009 to be the bottom of the island market.

Sales for the month of June were about average with 21 properties closed (SF-9, Con-9, Dup-0 & Lot-3) compared to 30 closed (SF-22, Con-5, Dup-3 & lot-0) in June of 2008.  Year to date through June we are still running behind the same period in 2008.  As you can see from the charts on my web site, sales for June 2009 Y-T-D was 106 versus 140 for June 2008 Y-T-D.  In comparing the last full 12 month sales to the 12 months ending the end of 2008 you can see that average and median sales prices are down in single family and condos but seem to have stabilized in the duplex and lot type properties.  Because we are on an island, average and median sales prices aren’t as good a measure of the value of a property because of the high land cost (the lot value is about ¾ of the sales price).  If there are an unusual high number of sales on or near the beach it will skew these numbers up and if there are an unusual number in the middle of the island it will skew the number down.  The best method of determining value is comparing properties in the same general location even if the houses on them are in completely different condition because that can be adjusted more easily then the location.  From a good news standpoint the number of properties under contract continues to be strong with 46 currently under contract (SF-26, Con-18, Dup-2 & Lot-0).  Looking at distressed properties, (short sales, pre-foreclosures, in-foreclosure & bank owned) they continue to be under 5% which also is a good sign.  Until all the distressed properties are purged from the market we won’t start seeing any appreciation.

A good sign in the market is that the inventory (property for sale) continues to decline on the island.  The current inventory is at 548 (SF-277,Con-187, Dup-41 & Lot-43) down from 575 last month at this time.  As you can see on my website from the inventory vs. absorption rate chart we have less then 2 years inventory on the market.  As I mentioned several times in the past, the normal inventory for the island is in the mid to high $400K’s or about 2 years inventory based on the normal absorption rate so we’re in the norm now.

The biggest impediment to sales right now is the banks.  Buyers once viewed as perfectly qualified are being denied mortgages (see the New York Times article – Abundance of Caution Dampens Home Sales).  Even though it hasn’t affected us on the island as much as the mainland, it still has caused some contracts not to close which in normal times would.  The other half of the bank problem is appraisals.  Because of the overly strict guidelines for appraisals such as appraisers can only use properties sold in the last 3-6 months, getting properties to appraise has become a problem.  Because there are not many properties sold (about 18-20 a month) many times the appraisers are using properties that are no where near comparable and in some cases on Longboat or Lido Key.  These things have made it much more difficult to close contracts where buyers and sellers have agreed on price and terms.

Mortgage interest rates are still at an all time low.  They had gone up some at the beginning of May and just recently dropped back down again into the low 5’s for a 30 year fixed rate.  We are still in a very volatile market and interest rates will not be this good forever.  The 40 year average for a 30 year fixed rate is 7.5% and it’s a real possibility that we will see rates in this range in the next year or two.

For those of you who are looking to take advantage of this market to buy property on the island, now is certainly the time.  Check out Frank & Al’s great buys for some great values both in Entry level properties and Luxury properties.  As far as entry level; properties the short sale at 312 64th St is a great value and who knows what you can get it for.  Another good value is 105 Mangrove, one house from the Gulf and listed at what other west of Gulf Drive properties have recently sold at.  200 & 202 38th St are listed at $200K under the sales price per sq ft of properties sold with a gulf view in the last 6 months.

To summarize the market, the inventory continues to fall and is close to the norm.  Number of sales on the island is also in the normal range and prices are creeping down to what looks to be a bottom.

Sales activity for the month of May was above average with 23 properties closed (SF-11, Con-10 & Dup-2) compared to 27 (SF-14, Con- 9, Dup-3 & Lot-1) in May of last year.  Year to Date through May, in number of properties sold, we are running about 15% behind 2008 for the same period. Looking at the trends it looks like single family homes and duplex, average and median sales prices, have dropped a little but condos have dropped significantly since the end of 2008.  The good news is the number of properties under contract is still very high at 50 (SF-24, Con-20, Dup- 3 & Lot-3) which means most of those will be closing over the next 30-60 days.  It looks like the average sale price of property on the island has dropped about 15% since December of 2008 with single family and duplex’s down less then that and condo’s, taking the biggest hit, significantly more then 15%. The other issue regarding condos is that financing is very difficult because the banks are requiring appraisers to use comps that are no more then 6 months old.  Since there are only on average 4-5 sales a month in condos and most of them being in the low end of the price range (and a higher portion of distressed sales have been in condos), finding good comps that are new enough to use has been very difficult.  Financing of single family homes and duplex’s has not had that same problem.

The inventory continues to drop with it currently at 575 (SF-292, Con-195, Dup-42 & Lot-46) which is a positive sign for the island market.  If you look at the Inventory vs absorption rate chart, you can see that because of the low inventory level & the healthy sales rate that we have the lowest months of inventory available since the 4Q of 2005.  Again, the normal inventory on the island is in the mid to high 400’s.  If this inventory trend continues it’s good news for the market and will help prices to start rising sooner.
Looking at properties in trouble (short sales, foreclosure’s & bank owned) they are still under 5% of the inventory on the island while the mainland has 25% of the inventory in this category.  These properties are the basis for the fluctuation in prices up and down (when I say we’re bumping along the bottom) because they are mixed in with arms length transactions. Once these distressed properties get off the market (I predict they will be off the market by the end of the year) we will have all arms length transaction sales which will reflect the actual market and will be the base for future appreciation.

There are some terrific buys right now from starter homes to luxury homes. In Frank & Al’s Great Buys this month all four properties are listed at great prices. The property at 105 Mangrove is one house from the beach with a heated pool and a great rental. A third bedroom could be added very easily which would increase the rental production of this property with very little expense. The last four properties sold west of gulf drive within the last 6 months have sold in the high $500’s and low $600’s and not as good a property as this one.  If you’re looking for a starter single family home 204 Archer Way is a great buy.  Just one house east of Gulf Drive, it’s a cute 2BR/2 bath “cottagy” remodel that is a block to the beach.  For the buyers looking for a Luxury Direct Gulf Front 108 36th St (Palm Gables Unit #4) has great value.  This 3 bedroom/ 2.5 bath direct gulf front with panoramic gulf views, has so much custom finishes you have to see the property 6 or 7 times to remember it all.  Designer furnishings from Robb & Stucki and custom painted murals can’t describe the workmanship in this Condo.  If you’re looking for luxury with the size of a home (3100 sq ft & 2500 sq ft) then 200 & 202 38th St, a two unit condo with individual 2 car garages, elevators and pools with gulf views is the property for you. As you can see from starter home to luxury gulf front there are some wonderful buys to take advantage of.

Again, this is certainly the time to buy if you’re in the market for real estate on the island. Another positive sign regarding the market is that over the last 30 days or so I’m seeing sellers rejecting outright low ball offers from buyers just looking to take advantage of a desperate seller.  Most of the desperate sellers seem to be gone.  Sellers seem to be willing to only go down in price so far and that’s it.  It takes both a willing seller and buyer to make the market and now that sellers are pushing back we may be getting to a balance in this market.