Saturday, November 18, 2006

Florida's existing home sales down, median price down in September

Florida's existing home sales down, median price down in September

Are you interested in claiming a piece of the Sarasota real estate market? Do Sarasota homes interest you? Well, you have good reason to focus on Sarasota, Florida, despite the misleading numbers that might be given to you about the Sarasota real estate market right now. Here is a guide to the general trends of the industry so you can better understand what’s going on.

The whole country has seen a boom and small bust in the real estate industry. After an impressive year of sales, revenue has now (in 2006) declined and home construction has dropped off as well. But this downward trend is a relatively small one (in most regions) and is really indicative of a new, promising stability. Moreover, it may inspire more buyers to come to the table.

Florida, while a member of the region that has done the best in the real estate market (the South), has had some struggles. Especially due to natural events like Hurricane Wilma, South Florida has had had some steep drop offs in sales and the like. However, as a whole, it seems to be stabilizing like the rest of the country. The same goes for the Sarasota real estate market. Sarasota homes are still an in-demand item and there are some positive trends that may mean they become even more sought after in the future.

The Florida Association of Realtors (FAR) has documented the statewide decline in home sales. Basically, there's been a 34 percent decrease in sales (12,485 units were sold, as opposed to last year’s 20,451). The price of the average home in Florida only went down about 1 percent however, to $243,900. But generally, in the past five years at least, sales have increased; some homes increased in value and others decreased.

As for the rest of the nation, a similar trend is apparent, according to the National Association of Realtors (NAR). An existing single-family home went for about $225,700 in August, down only about 1.7 percent from September 2005. In California and the Northeast, the average price of a home is above this average however.

Even though 2006 will be significantly slower in pace than 2005, it still promises to be the third strongest sales year on record! This is because while 2006's numbers may be overshadowed by the housing boom of last year, they will still be high, resulting in the new stable atmosphere that is being reached right now. Assuming interest rates remain level and employment continues to increase, NAR has a positive outlook about future sales activity (it ought to be lively).

Even though Sarasota homes have seen declining sales this year, the Sarasota real estate market is merely reflecting the overall national trend. Even Miami sold 100 less units this year as opposed to last year. So it's not much to worry about. Prices, as a whole, are leveling out and this is something to keep in mind when judging the Sarasota real estate market.

Sarasota is the cultural heart of Florida and a popular tourist destination to boot. So it still has great potential, despite the inevitable slowdown in pace. In fact, it may even have a significant increase in sales in the coming years, as baby boomers start to buy second homes in states that sport great vacation spots -- like Florida (and consequently, Sarasota!).

Not to mention, the recent decline in condo ownership may start to rise again, as a result of this. Anything's possible in real estate. Coastal cities have especially dynamic real estate markets, as they are vulnerable to unpredictable natural disasters and off the heels of Hurricane Katrina, this now seems truer than ever.

The smaller markets in Florida -- like Pensacola -- have actually flourished, which is a good sign for other cities in the state, including Sarasota.

Overall, in Florida, the real estate will always be in-demand and other factors like interest rates and mortgage rates are not too shabby, so the conditions aren't bad for the industry. Likely, the state will see another subtle rise in sales and find a comfortable pace, including the Sarasota real estate market.

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