2007 seemed like it was just a blink of an eye and 2008 is now upon us. We are all pretty familiar with why we've had a weaker Real Estate market over the past two years so I won't go into all of that again. Let me run down the market stats so we can look at where this market is headed in the future.

I'll start with single family homes. As you know, my statistics are always from Destin through Inlet Beach. This includes all of Destin, Miramar Beach, Santa Rosa Beach, Grayton Beach, Watercolor, Seagrove, Seacrest Beach, Rosemary Beach, and Inlet Beach.

Sales this year jumped from 618 in 2006 to 666 in 2007. An increase of about 7.5% over last year's sales. Inventory moved slightly upward from 2,357 homes in 2006 to 2,523 homes in 2007. That is an increase of right at 7%. Although the inventory moved upwards, the months of inventory on the market remained the same due to the increase in sales. Many people will say there were more sales because there was more inventory. That is incorrect! More buyers is more buyers and I'll address the inventory problem in a minute.

The average sales price in 2006 was $872,734 compared to $849,917 in 2007. A slight decrease in sales price, but the average listing price is exactly the same. I am seeing a major problem in this market is that it is flooded with overpriced homes. Many sellers don't need to sell, but have their homes on the market thinking that the "Golden Buyer" may come along and pay 20% over what their home is worth. Too many people still have visions of 2003 when you could put a sign in the yard and have 3 contracts by mid-afternoon. Is a home really on the market if it is priced at $800,000 while the exact same house next door just sold for $625,000? To me, that property is not on the market. The problem is that it is on the market according to our inventory numbers. I believe that if we took all unrealistic properties off of the market there would be about a 35-40% decrease in inventory. I think that people will begin to realize this and withdraw from the market or lower prices to competitive points before long.

Here is my outlook for 2008. I see this market hitting bottom this year or 2009 at the very latest. That's if it hasn't already. You usually can't tell until after the fact. There are already many homes on the market under the cost to rebuild and many are already back to pre-boom prices. That can only lead me to believe that we are very close to the bottom right now. The day of the flip is over....for now. This market will continue to be a strong investment for those looking to hold for 3 years or longer. Foreclosures haven't seemed to affect our area nearly as much as I would have thought, but I think that early 2008 will give us a little more insight on that. Foreclosures and short sales are great ways to buy property, but not the best in my opinion. Most foreclosures are people who bought at the peak of the market in 2004-2005 and overpaid by 25-35%. The bank is wanting to get as much money back as possible! The prime sellers are those who bought pre-boom and are needing to sell now. I believe that we will see another increase in sales this year, and probably a larger jump than the 7.5% increase that we saw this year. Too many people are hovering like hawks and watching this market very closely. The steals are being bought up fairly quickly at this point. I think January and February will be key indicators for us. In January of 2006 we had 42 sales and 35 in 2007. In February of 2006 we had 49 sales and 45 in 2007. 2007 sales passed 2006 through the summer and in the later months. Will the hot streak carry into early 2008? If it does I think we're in for a fairly strong summer! Well, that's my take on it and I've probably bored you all enough.

If you need anything at all please feel free to contact me at any time. If you would like a write up on the condo market please contact me, I don't want to drag this email out any longer than it already is. Also, if you have friends or family that would like to receive my information just send me their contact information.

I wish everyone a very happy and blessed 2008!

Josh McLean