Southwest Florida is Clearing its Throat
When I was a kid in Harrington Park, New Jersey, I got about one or two nasty colds a year. Here in Florida I get them about once every two years. I have no idea if this is a direct result the tropical location or my compulsion as I got older to constantly wash my hands. But I do know that my colds normally took the same course: Headache, sneezing, congestion, cough, and then the breakup. The breakup was always accompanied by a lot of throat clearing. Once I got through that, I was good to go. In fact I learned to recognize the throat clearing and would think, "Thank goodness THIS cold is almost over."
South West Florida is clearing its throat. I know there are many doomsayers out there that are affected by the global crisis and the way the media is covering it. These problems are real: unemployment, bailouts, tight credit, and depleted savings. But you need to separate our market from the rest of the world.
Some cities like Boston, New York and Charlotte, NC have colds that are still getting worse. These metro areas have not seen the big price declines that we have seen - their drops are still occurring. There are many reasons for the longer stability in those markets or better said the reactionary instability in ours. We are a big second home market. Borrowers are more likely to hold onto their first homes that they have lived in for years up north rather than their recently acquired future retirement home here in Florida. There was not as much speculation and investor buying in those markets and they have a broader economic base. Boston, New York and Charlotte are not dependant on tourism as we are.
But we are clearing our throats, that's for sure. The price declines are about over, and we are starting to feel better. Lee County closed 81 homes just yesterday in our local market, and I suspect December numbers will be huge.
According to today's Wall Street Journal, the nation is at 2004 housing prices. But here in Florida, in many cases, we are below that. Be careful with national data. Remember all real estate is local.
Tatiana and I are going to see 14 homes today in Cape Coral. I asked her to make as many appointments as she good to see homes in Cape Coral with the following criteria: Within one mile radius of an elementary school, a minimum of three bedrooms and two baths, vacant, and priced under $100,000. There were 84 to choose from, and this was just by one school!
(Let me mention as an aside here that Tatiana had a very frustrating time setting up showing appointments. Showing a home to a prospective buyer or his agent is certainly a critical step in selling a home. It should be easy. In general, it was not. Some agents did not return phone calls; some duty desk people did not how to access the home, or some forwarded her to an appointment desk that knew nothing about the home or how to access it. I can tell you this. If I was a seller and my agent did not make it easy to show a home, I would be very upset. In fact, if you ARE a seller, I would test the system that you have hired o sell your home. How easy is the agent to get hold of? How easy is the house to show? Are you being treated like the important client that you are?)
An interesting thing about these homes we are going to see; very few of them have been on the market for a very long time. Keep in mind this is in a market that homes have been languishing for months without offers. But these homes are decidedly different. Apparently they are priced right. Will they sell at their ask price? Probably not. But they will sell to someone that recognizes value and affordability. They will soon be occupied, either by a tenant or a proud owner.
Getting rid of this inventory is our way of clearing our throat.
After my year end summary last week of the opportunities for 2009 (Click here to read it), I received some questions from a few of my European subscribers. In essence, they wanted to know my comments about all the bad news they hear about Florida. They are afraid. After all, their economy is hurting as well. My response was yes, it is a terrible market here - but for the sellers; and a great one for buyers.
They also asked me about hurricanes. I told them that we build for hurricanes like the North builds for cold weather and snow, California builds for earthquakes and mudslides and fires, and the Midwest builds for tornados.
I am also hearing from our competition. I am talking about markets in Majorca, Southern France, and Dubai. Agents in those markets are soft and are losing the ground they gained from Florida as a second home market when our prices were high enough to send buyers to them. Now they are sending us buyers.
Friends, I do not know how long into 2009 we will still be clearing our throat, but I for one am glad that we are; I know the he end of my cold is near.
Gail and I wish you a prosperous and peaceful New Year. Stay safe, healthy, and close to your family.
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