Federal Reserve Chairman Ben Bernanke presented his most optimistic economic outlook report at the National Press Club last week. “We have seen evidence that a self-sustaining recovery in consumer and business spending may be taking hold”. Improved business and consumer confidence, low interest rates and looser credit conditions will likely lead to a improved pace of economic recovery in 2011.
In Florida economists such as Hank Fishkind believe that recent improvements in job growth in tourism and education sectors, strength of regional retail sales and the 2 percent cut in payroll taxes will spur the recovery for the Sunshine State.
Healthy predictions continue as the National Association of Realtors (NAR) anticipates the sale of existing homes to rise 7.9 percent to 5.3 million in 2011; a stark contrast to 2010 figures when prices fell 4.8 percent. The median price of existing homes as a nation has reached $173,800 and is expected to rise in 2012 to $177,900.
Sales of new single family homes are expected to surge. Early predictions indicate an increase of 17.7 percent in 2011 to 374,000 sales, after a 15.5 percent drop in 2010. This upward trend is expected to continue as NAR predicts sales of new homes to reach 565,000 in 2012.
The Sunshine State 2010 Review
The State of Florida made significant gains to round out 2010. Existing home sales rose 5 percent for the year; totaling 170,848 sales compared to 162,873 total sales in 2009. While activity levels increased, the statewide existing median price dropped from $142,500 to $136,500. The Florida condo market was the source of media attention throughout the year, with investors and private buyers alike taking advantage of the favorable prices. A total of 72,050 units were sold in 2010, a gain of 29 percent over 2009. The existing condo median price was $ 91,300 in 2010, a 15 percent decrease compared to 2009.
Florida Realtors President commented, “The homebuyer tax credits helped to fuel home and condo sales during the first half of 2010, while favorable affordability conditions and historically low mortgage rates continued to bring buyers into the market in the waning months of the year.”
Naples New Year
Naples is a beehive of activity, especially as the remainder of the country continues to endure freezing temperatures and snowstorms. Out of state license plates are the norm driving down Route 41 South and arriving to your favorite restaurant without reservations is not an option. The energy of our loyal visitors contributes to the positive and optimistic spirit that makes “the season” in Naples such a joy!
We enter the busiest time of the year on an upswing. According to the Naples Board of Realtors (NABOR) overall closed sales increased by 10 percent from 7,126 sales in 2009 to 7,840 sales in 2010. While the under $300,000 price point has dominated our market for the past three quarters, a significant increase has been detected in the $1 million and above price category. In this group, pending sales increased 29 percent, while closed sales rose 33 percent from 2009. *Pending sales provide an accurate gauge as to the direction of the market, given that contracts in this category are expected to close within thirty to sixty days given the current climate. The overall median closed sales price throughout Naples was $180,000. For properties priced over $300,000, the median closed price increased 4 percent to $544,000 over 2009 reported figures.
Homebuilders are slowly getting back on their feet, but short sales and foreclosures are a “new normal” alternative for all buyers. The ability to obtain builder financing as well as lower price points driven by distressed sales continue to be key factors. Investors and developers that weathered the storm have done so by snapping up fully developed lots left by ailing builders at the start of the credit crisis.
Jobless figures will begin to dwindle as consumers embrace new spending patterns and corporations and investors fuel new ventures. A sustained period of stronger job creation is what economists are waiting to quantify; it will happen, just not overnight as many wish and some almost expect. For those of us fortunate to have the ability to purchase luxury goods and real estate, the attraction can be categorized as altruistic. Options for acquiring sound investments abound, and such acquisitions will directly influence the economic climate of the local area. Is there really a better incentive to open up those checkbooks?
For additional information regarding the local real estate market in Naples, Florida contact Fatima@NaplesMeridian.com
Sources: NABOR. 01/14/11, Inman News. 01/27/11, Florida Realtors 01/20/11,02/04/11