As inventory falls, agents' hopes rise
They say the right location and price may be turning the housing market around
Published Friday, June 20, 2008 at 4:30 a.m.
Last updated Friday, June 20, 2008 at 4:55 a.m.
For real estate agents like Lueanne Wood, the news has been a long time in coming: The backlog of homes for sale in Southwest Florida has dropped steadily since the beginning of the year.
"We're back in the saddle again," said Wood, a Venice-area agent for Coldwell Banker Residential Real Estate. "The baby boomers are back and they are coming from everywhere and they don't discuss taxes or insurance -- that's not even in their vocabulary."
So far, her June sales figures are already up over the total for June 2007, and her sales last month increased five-fold when compared with May 2007, she said.
The right site is driving the movement, followed closely by the right price.
Wood's story is one echoed by real estate agents around the region.
Leading the pack is Sarasota County, where the months of inventory for homes under $1 million have been roughly halved from January through May, reports Sacramento, Calif.-based real estate market trend analyst Trendgraphix Inc. The inventory represents the number of months it would take to sell all the houses on the market.
The company's data is not perfect because it bases its findings on the region's various Multiple Listing Service reports, which often overlap and have other statistical anomalies. Also, not all the homes that are no longer on the market were sold. Some were pulled by frustrated sellers who could not find a buyer at the price that the sellers wanted.
But the data does offer a snapshot of the housing market that is welcome to weary sellers and agents who have been struggling since the housing bubble burst in mid-2005.
"We are back to '05 and '06 numbers," Wood said. "The business has absolutely turned around."
6 months, 164 houses
Charlette and Bill Armstrong are among those who have contributed to the decline in the inventory.
After taking a loss on their California home when Bill Armstrong came here in December to be a regional vice president for Bradenton-based Champs Sports, the couple were leery about buying a new house because they did not want to get burned twice.
"We just looked and looked and looked," Charlette Armstrong said. The Armstrongs finally found what they were looking for six months and 164 houses later.
"Finding the right house was a lot of it," Charlette Armstrong said. "But a lot of it was we saw prices continue to decrease. We waited until we couldn't wait any longer and then pulled the trigger."
That was in April, when their purchase of a $500,000 home in Manatee County contributed to a 5 percent increase in sales for the Sarasota-Bradenton market. During April, sales rose 6 percent in the Charlotte County-North Port market when compared with the same month a year ago.
Realtors are saying that the May numbers, scheduled to be released on June 26, will show gains -- although not as impressive as those for April in Fort Myers-Cape Coral, a market very similar to this region that saw homes move at a pace 41 percent higher than in 2007.
The phenomenon was driven largely by a flood of foreclosed-upon homes that banks were seeking to get off their books.
Home prices in April dropped significantly in every market in the state except Fort Walton Beach, where they rose a modest 1 percent.
To many, the April drops were further evidence that sellers are cutting prices significantly, and the numbers showed the impact of foreclosures.
In Sarasota-Bradenton, April's median home price fell $34,000 to $268,200 when compared with the same month last year. In Charlotte County-North Port, prices fell $53,700 to $143,400 during that same time.
But Sarasota-Bradenton's price was 12 percent higher than March -- and there have been other such indications of some bottoming in recent months.
The inventory drop comes at a time when real estate agents and home sellers and buyers are trying to determine if the region has reached a bottom, which leads to the billion-dollar question: Is recovery on the way, or do prices still have further to fall?
In Sarasota County, the months of inventory for single-family homes priced under $500,000 dropped from 28 in January to 14.6 in May, or nearly 48 percent. It was more pronounced for homes priced from $500,000 to $999,999: 42.3 months to 18.2, or nearly 57 percent.
Six months of inventory is considered a normal market.
Kathy Roberts, chief executive of the Sarasota Association of Realtors, credits the decreasing inventory to three factors: more houses are being sold at lower prices, fewer are being listed and some sellers have taken their homes off the market, thinking the offers they have received are too low.
Peter Crowley, president of Sarasota's Re/Max Alliance Group, said savvy investors are moving in and buying both foreclosed and nonforeclosed properties. He agrees that price has been key.
"Realistic pricing is the dominant factor," Crowley said. "People who really want to sell their homes are realizing prices need to come down."
Crowley expects small ups and small downs during the summer months, activity that is indicative of bumping along the bottom before slow but steady improvement.
"We entered this much sooner than other markets in the country," he said. "And we're seeing signs of the improvement before other parts of the country."
'Money in the pipeline'
Sales in his territory have been generally rising since December, says Bill Dryburgh, president of the Punta Gorda-Port Charlotte-North Port Association of Realtors.
"It won't go back to '04 and '05 numbers, but every month we are going up, and I'm a happy camper," Dryburgh said. "There's money in the pipeline and, in the inventory out there, there are some really great bargains." He was recently showing a three-bedroom, two-bath home with a pool that was listed under $100,000.
"It doesn't get any better than that," he said.
For homes priced under $500,000 in the Charlotte County area, inventories have fallen from 32.4 months in January to 14.4 months in May, or about 56 percent. For homes from $500,000 to $999,999, the drop was 62.4 months to 50.6, or about 19 percent, Trendgraphix reports.
Dryburgh acknowledges that sellers have been pulling homes off the market. He and other members of his association have been pressuring sellers with unrealistic price expectations to get out of the way.
"They are out there fishing for a larger figure but the homes are not priced realistically," Dryburgh said.
Different in Manatee
Things are slower in Manatee County, though it, too, is seeing the number of homes declining. Properties under $500,000 saw an inventory drop comparable to Sarasota County, but pricier homes dropped by a smaller amount.
Still, there are other good signs, said Barry Grooms, president-elect of the Manatee Association of Realtors and a broker with Re/Max Alliance in Bradenton.
"We are starting to see properties with multiple offers and we haven't seen that in three years," Grooms said. "Confidence has been restored a little bit and consumers are realizing the prices are pretty good."
Grooms thinks that the market is at or near its bottom, helped in part by foreclosures.
"While foreclosures are bad, they are a necessary evil for the market to purge the inventory," he said. "We're seeing firefighters and teachers and young professionals who can now buy in Manatee County, which is awesome."
Some Re/Max agents who specialize in selling foreclosures are having their best months in years, and there is pent-up demand amongst baby boomers and even locals that is beginning to show now that prices have fallen, Grooms said.
For homes priced under $500,000 in Manatee, inventories have fallen from 22.1 months in January to 16.6 months in May, or about 25 percent. For homes priced from $500,000 to $999,999, inventories dropped from 68.5 months to 41.2, or about 40 percent.
Stan Rutstein, an agent with Re/Max Gulfstream in Bradenton, thinks that Florida's historical strengths will win out once the post-boom doldrums pass.
"Even with all the taxes and the insurance and the hurricanes, people still want to come here," he said.
Some Realtors already have done more business in 2008 than all of last year, says Sue Louis Wolverton, Coldwell Banker Residential Real Estate's senior vice president for Sarasota Bay, and inventory will be key to the turnaround.
"We have to see the inventory get depleted until we see the properties increase in price again," Wolverton said. "But I think it's really close."
Last modified: June 20, 2008 4:55am