It's a sellers market
There’s a rumor going around on Anna Maria and like most rumors, no knows for sure where it started or if it’s true. Whether it’s true or not, just the rumor is exciting for anyone interested in Island real estate.
A seller’s market is defined as a market in which goods are scarce, buyers have a limited range of choice and prices are high. Well, except for the fact that Island prices may not be as high as they once were, it looks like we’re in a seller’s market, according to those in the know.
As reported in this paper, sales in 2012 were the highest in 30 years except for the go go years of 2004 and 2005. During these years Island brokers sold an average of 436 properties. Last year they sold 430. Let’s see what that does to the average sale price during the coming busy sales season.
Supporting what our local brokers are reporting, sales of existing homes nationwide in November rose 14.5 percent from the previous year, according to the National Association of Realtors. At the end of October, there were only 2.14 million existing homes for sale nationwide.
Also according to the National Association of Realtors, last year appears to have been the first since 2006 in which home prices rose. This is supported by the Standard & Poor’s/Case-Shiller Index reporting that the November home prices rose 5.5 percent nationwide. These are, of course, averages, with some regions showing an exploding appreciation rate like Phoenix, which was up 22.8 percent, and San Francisco, where prices increased 12.7 percent from November of 2011.
Because of these recent statistics, many economists expect home prices to keep rising in 2013. Low interest rates are remaining low, according to the Federal Reserve, and slender inventories of homes continue to plague the market pushing prices up.
Competition in the real estate market has buyers starting to think outside of the box in order to get their offer accepted. Buyers who are coming up against multiple offers on properties are starting to submit their offers along with a “pitch letter.” The pitch letter is intended to make faceless buyers more acceptable to sellers and play on their emotions.
It’s actually a good idea, since most real estate transactions, especially in Florida, involve intermediaries with the buyer and seller frequently not meeting at all or meeting for the first time the day of the closing. The letters are particularly effective when they create a personal connection with the sellers, especially if the sellers have lived in their home for a long time and have mixed emotions about leaving all of the memories the house contains. Buyers who provide an image of their family and their plans for the home paint a picture of the home’s future, which has tremendous appeal to sellers.
Also giving the seller a concise outline of the financials of the transaction without all of the legal language is frequently appreciated. And, of course, finding a common denominator between you and the seller is always good as well as highlighting the wonderful features of the property.
In spite of consumer confidence, which fell by 8.1 points in January, the not very optimistic view by the average American does not appear to be extending to making real estate purchases. Imagine what would happen to the market if opposing sides in Washington could get together on taxes and budget cuts.
As rumors go, entering into a seller’s market is one that I am ready, willing and able to embrace. This is one rumor that is a good thing to repeat, so spread the word.