There was a great article in last Sunday's Pensacola News Journal titled "Meltdown to Rebound - When will area economy turn around?" The News Journal brought together a panel of five Pensacola area economic experts for their read on what our future will bring.
One of the experts interviewed for the Pensacola News Journal story, Al Muller from Metro Market Trends was featured in a blog I wrote back in July on the same subject - Real Estate Trends, What's the Real Real Estate Story
Interestingly, several members of the panel - including Al - pointed out that the "rapidity of the economy's meltdown" was the most surprising thing about it. Indeed, when I heard Al's presentation back in July he was encouraged by some bright spots in the housing market which, although small, were pointing to a slowdown in the rate of decline. But that was before Wall Street's credit crash hit the news.
Muller had predicted that we might see the Greater Pensacola Bay area (Pensacola, Milton, Gulf Breeze, Pace, Escambia and Santa Rosa Counties) housing market start to get back on track to our traditional 4.5 to 5% annual appreciation rate by late '09 or early 2010. According to his comments in the Pensacola News Journal article he feels it will now take a major catalyst like federal tax incentives coupled with attractive interest rates to kickstart the local housing market. "Bottom line," Muller said, "as long as we're in a recession the real estate market won't get better."
So, what does this mean for the average person looking to buy or sell real estate in the Greater Pensacola Bay Area?
Number 1 - For Buyers - Today is a great day to buy! Certainly credit is tight and a good credit score is important. However, the current interest rates are incredibly attractive and there are some great loan products and incentives - particularly for first time home buyers - in the market now. Let's hope congress is listening to people like Al Muller and we see some significant tax incentives for home buyers in the new year. Who wouldn't be excited about a 20% tax credit for buying a home? Write your representatives!
Number 1 - For Sellers - Listen to a professional real estate agent and PRICE YOUR HOUSE FOR THE MARKET. Many of today's potential sellers took advantage of the appreciating home prices from 2003 to 2006 and took out equity loans on their homes. As prices have declined this has made it difficult to sell as they are essentially "upside down" in their home.
The reality is that homes must appraise for buyers to obtain the loans to purchase them. As a seller, analyze what you really need out of your home sale to make it work for you. In 2008 I had a seller who had to transfer with his job and was in this "upside down" situation. Once we looked at the cost savings he had for housing in his new home town things didn't look quite so bleak. We priced his home below the neighborhood comparables and sold it quickly. Yes, he came to closing with cash - never fun as a seller - but he purchased on the other end of his move for much less than he had anticipated and got a very favorable interest rate which allowed him to actually buy more house than he had expected.
Stay tuned to my blog as I will continue to provide updates on local housing information. As always, I will be happy to answer any real estate questions you might have. If I don't have the answers, I will be happy to track down an expert who does!
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