We all have heard various things about the real estate market as a whole. The media bashes at the market and forecasts all point to doom and gloom in the coming months, even years. But what is really happening.
In reviewing numbers for the month of August given by FAR (Florida Association of Realtors) and NAR (National Association of Realtors), and basing it on the localities, we can see how it is affecting us here in Florida. Throughout the state, we resemble the nation quite well. We have some markets doing well, some holding steady and some are in the decline. The nation is doing the same during this corrective period.
So, when we look at the data, we see that statewide statistics show a decline of home sales by 34% year over year (August 2006 compared to August 2005). Even with this decline, the statewide median price of homes remained unchanged at $248,400, and still respresents an 89.9% increase since August 2001. Not bad.
This hardly respresents a bubble burst that the media has been forecasting for about a year now. So, now let's look at a couple of Metro areas.
Jacksonville is one of the larger MSAs and shows a fairly good representation. Year over Year, Jacksonville saw a decline of 19% in number of homes sold. In this same comparison, median home prices went up 4%. However, looking at the condo market here we see a much worse picture. Condo sales were down 45% year over year and the prices fell by 4%, opposite of the median home price. Jacksonville has a strong economy, so the houses will probably continue to be good, and maybe the condos will rebound as well.
In the Lakeland area we see a similar picture regarding home sales, but a different picture regarding condos. Lakeland showed a 14% decline in home sales year over year with a median price increase of 6%. What is interesting is that while Lakeland's condo market saw a 25% decrease in sales, they saw a 32% increase in the median existing price of condos.
Well, I think it is very clear that there is a wide variety of things happening in the Florida market these days. The correction has taken place, showing signs of slowdown to more realistic volume levels. But we are not seeing the major price reductions that the media has been painting for a long time now. The numbers show that even in your state, your local area may be different than the state as a whole and is certainly different than other local areas. But, in general, we are only experiencing a correction and there is no "bubble".
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Robert:
Good post on a subject that is near and dear to everyone's heart. Many folks, Realtors and Consumers alike, tend to take all this as doom and gloom. I believe that the perception of this doom and gloom casts a negativy that serves to exacerbate the real story. In my opionon (and in agreement with you) we are, at least, at this point experiencing a correction, not a bubble. In fact, I believe that there is a good argument that the local housing market is really closer to a "normal" market.
The market has fed on itself for the past few years and as with anything there is a swing that will occur. It may be harder for those Realtors that have entered the profession during this "hay day" to grasp this but the old timers that have survived these market swings would probably agree.
When the year over year numbers are placed in contrast or comparison against the past couple of years obviously doom and gloom can be perceived very easily. But take the sales numbers for the past year, exlude the 'markert frenzied" years, and contrast them against data from more stable periods and you probably could see "a norm" in the data. A norm that represents correction, which is good for the most part.