Sarasota real estate market at highest level since 2005

Property sales in May 2010 in the Sarasota market once again hit the highest total since 2005 and median sale prices continued the steady pace observed in recent months.

The 766 sales were the highest for the year, topping the April 2010 total of 757, and were the highest total since December 2005, and 51.3 percent higher than the May 2009 total of 506 sales.

Pending sales were once again strong, hitting 857, but were slower than April 2010. The March and April pending sales figures both topped 1,000, and reflected a last minute rush to beat the federal homebuyer tax credit deadline.

“The May 2010 statistics continued to show that the Sarasota real estate market is continuing a steady recovery,” said 2010 SAR President Erick Shumway. “We saw a slight dip in the pending sales, which will likely be reflected in the sales numbers over the next 30 to 60 days. But median sale prices are higher than last year at this time, and we remain optimistic.”
Members of the Sarasota Association of Realtors® sold 539 single family homes and 227 condos in May 2010, a huge jump over May 2009, which saw only 375 single family homes and 131 condos sold.

The median sale price for a single family home was also trending higher at $169,000, up 8.4 percent from last May’s figure of $155,000. For the last 12 months combined, the median sale price for single family homes was $165,000. For condos, the median price was $184,500, slightly higher than last May’s figure of $181,000, while the median sale price for condos over the last 12 months was $192,000.

The pace of sales quickened for single family homes, with the average days on market dropping to 168, from 195 days last May. For condos, the figure stood at 213 days, slightly higher than last May’s figure of 203 days.
The level of sales of distressed properties (foreclosures and short sales) rose slightly in May 2010 to 40 percent of the overall market, from 38 percent in April 2010. The distressed market topped 48 percent in late 2009, so the overall trend remains downward – a good sign for a market returning to normal.

The property inventory level remained steady in May 2010 at 6,094, which is the lowest level since late summer of 2005.
The months of inventory for single family homes in May 2010 dropped to 7.2 months, the number of months it would take to sell all available homes at the current pace.

This was a significant drop from May 2009 – 14.3 months – and very near equilibrium. For condos, the figure fell to 9.7 months, much lower than last May’s figure of 19.0 months. Once the market reaches the 6 month level it is considered to be in equilibrium between a buyers and sellers market.

Justin Shirley
CEO
Shirley International Realty
941.448.4872
www.JustinShirley.com

The drop means the number of people losing their homes will start to fall. But some pain from the crisis is sure to persist. Because millions of people are already in foreclosure, deeply discounted houses will put pressure on home prices for years.

“Housing is on a path to recovery,” said Mike Larson, a real estate analyst with Weiss Research. “It’s going to be a very long, gradual process.”

In high-foreclosure cities like Las Vegas, Phoenix and Miami, homes have lost roughly half their values from their peaks. But a report Friday from the Mortgage Bankers Association showed Nevada, Arizona and Florida had some of the biggest declines in new delinquencies.

The figures probably mark “the beginning of the end” of the crisis, said Jay Brinkmann, the trade group’s chief economist.

However, more than 15 percent of homeowners with a mortgage have missed at least one payment or are in foreclosure, a record. Worse, nearly half of all delinquent borrowers were at least three months behind on their payments, up from a typical level of less than 20 percent.

“The bad news is that we still have a big problem,” Brinkmann said. “The good news is it looks like it may not get much bigger.”

That’s because the percentage of borrowers who missed just one payment on their home loans fell to 3.6 percent in the October-to-December quarter from 3.8 percent in the third quarter, according to the Mortgage Bankers Association. That decline was even more surprising because delinquencies usually rise at that time of year due to higher heating bills and holiday spending.

In another encouraging sign, the number of borrowers who had missed at least one payment but were not yet in foreclosure also fell for the first time since the beginning of 2007.

Banks are delaying the foreclosure process, traditionally between four and six months, as they evaluate borrowers for help under the Obama administration’s $75 billion mortgage-relief effort. It lowers borrowers payments to as low as 2 percent for five years and extends loan terms to as long as 40 years.

But experts warn that hundreds of thousands of borrowers will not be eligible or will not complete the process. So far, only 116,300 borrowers out of 1 million who enrolled have had the terms of their mortgages changed permanently.

Despite the government’s efforts, there may be 6 million foreclosed homes that are put on the market over the next three years, according to Barclays Capital.

Timing is key. If banks unload them suddenly, “it will be much more detrimental to the housing recovery than if it’s a slow, gradual bleed,” said Michelle Meyer, a Barclays economist.

On Friday, Obama announced that housing agencies in the five hardest-hit states of Arizona, California, Florida, Michigan and Nevada will receive $1.5 billion in financial rescue money.

It will go to local programs to help unemployed homeowners, “under water” borrowers who owe more than their home is worth, or to give lenders incentives to assist borrowers with second mortgages. The programs will need to be approved by the Treasury Department.

“Government alone can’t solve this problem,” Obama said. “But government can make a difference.”

In a briefing with reporters, administration officials acknowledged that the effort was just a small one. But they said it could help develop broader national solutions. “What we’re trying to do here is foster innovation,” said Herbert Allison, an assistant Treasury secretary.

WASHINGTON (AP) – Dec. 16, 2009 – Construction of new homes, helped by better weather, rebounded in the U.S. in November following a setback in the previous month.

The gain is a hopeful sign that the housing recovery is continuing, a development viewed as critical to lifting the overall economy out of recession.

The Commerce Department says construction of new homes and apartments rose 8.9 percent in November to a seasonally adjusted annual rate of 574,000 units. The gain represented strength in all areas of the country although the increase was slightly lower than economists had expected.

Applications for new building permits were also up, rising 6 percent to an annual rate of 584,000 units, a stronger showing than economists predicted.

Copyright © 2009 The Associated Press, Martin Crutsinger

Justin Shirley
CEO
Shirley International Realty
941.448.4872
www.JustinShirley.com

September sales skyrocket as market approaches equilibrium
 
Real estate expert Barbara Corcoran listed Sarasota as the number one place in the nation to buy a property in her latest “hot market” prognostication. She cited the lower property prices – 30 percent below last year at this time – combined with a recent price surge of 13 percent in the last quarter, plus Sarasota’s unique “metropolitan” cultural appeal for boosting this area to the top spot.
 
On the Oct. 6th Today Show, Corcoran said Sarasota was the top place to buy real estate in the nation today, an opinion shared by SAR and most area real estate professionals.
 
As a confirmation of Corcoran’s report, home and condo sales jumped by 35 percent in September 2009, compared to the same month last year, and 9.7 percent from the August 2009 stats in the Sarasota market. Total sales stood at 554 in September, compared to 409 total sales in September 2008. The breakdown was 399 single family homes and 155 condos sold last month.

 
Sales in September 2009, traditionally a slow month at the end of the summer, were unexpectedly higher than in August 2009, perhaps signaling an early end for the traditional slower season as we head into a hoped for robust fall and winter.
 
The median sale prices continued to be held down by the high number of bank-owned property sales and short sales, which accounted for half of the single-family home sales and a third of the condo sales. But the “discount rack” is beginning to thin out, and once the bargains are gone, there is the potential for price appreciation on a stronger scale. The median sale price for single family homes was $165,000 last month, up slightly from the previous month, but down 21.8 percent from a year ago. The condo median sale price was $162,500, down significantly from September 2008′s $190,000 figure.
 
The future price trend might well be upwards, as about half of the single family sales and one third of the condo sales involved short sales and foreclosures. Once these distressed properties are off the market, the normal, arm’s length sales should bring the median prices to higher, true value levels.
“We certainly agree with Barbara Corcoran, and her conclusions are what we’ve been saying for many months,” said Bill Geller, 2009 SAR President. “This is an amazing time to buy Sarasota properties at prices not seen since the early 2000s, or even earlier. But the public needs to understand – these prices won’t last. Once the market reaches equilibrium, and we’ve exhausted the distressed property pool, we will start to see more and more multiple offers on choice homes.”
 
The $8,000 first-time homebuyer tax credit was one of the factors in the recent market resurgence, which produced sales in September that nearly topped the 600 level for the second time in 2009. In addition, investors seem to have returned to take advantage of the price drops. Pending sales in September have also continued to show strong levels – very near the 800 mark – as the real estate market recovers after a two-year recession.
 
Pending sales have now exceeded the 800 level for seven out of nine months in 2009, after lingering in the 400 to 500 per month range for much of the previous two years. The statistic is a strong indicator for the next two or three months of sales, when many of these pendings will become closed sales. Pending sales are sales where an offer has been accepted during the month, but the sale has not yet closed. Even though some pending sales never close, pending sales are an indicator of current buyer activity.
 
Most of the statistics continue to point to a market in the initial stages of recovery. Inventory levels continued to decline and are now at the lowest point since the boom ended – a good sign for a market in recovery. There are now only 3,915 active single family listings and 2,337 active condo listings, figures not seen since August 2005 and earlier when the boom first started.
 
The “months of inventory” – the number of months it would take to sell all the available properties at the current sales rate – was down for both single family and condos. The figure is 9.8 months for single family and 15.1 months for condos. A figure of 6 months is considered to be a market in equilibrium between buyers and sellers.
 
Sarasota Association of REALTORS®

Unbundling the Real Estate Transaction:
Providing fee-based services as a real estate consultant
Julie Garton-Good, DREI, GRI

As a broker of twenty-five years, I’ve always had a problem with how our industry is designed. We spend eons of time consulting with buyers and sellers-for free. We receive no up-front fees, even though we’re expected to expend hundreds of dollars per listing (our stock in trade, even though we have no control over it) just to make the phone ring (as well as appease the seller, even though he has no earthly idea what goes into a marketing campaign!) We then spend dozens of hours each month driving buyer prospects around educating them, often to have them purchase from someone else–oftentimes a for-sale-by-owner. And last, but certainly not least, there’s the concept of service — we service the seller, we service the buyer. We provide service at every turn, hoping that the consumer will see value in all this service and reward our efforts by selling or buying with us. Then, and only then, do we get paid.
Correct me if I’m wrong, but is it likely that Bill Gates or Mary Kay Ash would use our current real estate sales model to design a multi- billion dollar business empire? No, I don’t think so either.

SERVICE DOES NOT EQUATE RESULTS

I believe that too much service may be part of our industry’s problem. Think about it — that which is readily available and given freely is often discounted. And are there times when too much real estate service could actually break down communications with the consumer, causing us to move away from, instead of toward, results?

Let’s say that you’ve had a seller listed for four months with very few showings. You service the seller, ad nauseam, mailing ads to him, calling on a weekly basis — even holding a broker’s open. If you could just get an offer on the home, you think you could sell it to the owner. After all, you’re keeping him informed with copious service.

While all this is happening, the seller is thinking, “If that agent would just DO something to get this house sold! He keeps sending me all this mail, but I’ve yet to see even one offer.”

Extended into the future, the seller is likely to change companies, assuming that the first agent/company was incapable of achieving the seller’s desired result of selling the house.

True, sellers don’t really understand what we do. But perhaps part of our problem as professionals is that we haven’t prioritized the aspects, of our business that SHOW value. We’ve been “majoring in minors” as the phrase goes; and we’ve awakened to a brave, new world where cheaper, more flexible, online products are empowering consumers and replacing much of what we’ve previously done as real estate agents.

AGENTS GIVE SERVICE: CONSUMERS WANT RESULTS

One reason our current real estate model is irreparably broken is that we erroneously equate service with results. In today’s “one size no longer fits all” environment, this couldn’t be further from the truth! That shop-worn yard sign on the seller’s lawn does no good for the agent’s/company’s image. In fact, it screams that “we haven’t gotten the job done–but we’re servicing you to death in the meantime!”

You’re probably saying, “‘Julie, this is the way we’ve always helped people sell and buy real estate!” While it may be the old way, it ain’t the only way! What if we could throw out the non-productive activities (those that could be done by someone else, maybe even the seller) like showing the house, in exchange for concentrating on our professional, personal, high-level talents like negotiating and troubleshooting the sale? If you had an ironclad agreement with the seller, what would be the harm in having him show the property — (being the one to announce to potential buyers “this is the kitchen”.) especially if it could free you up to render higher-level, more personalized, more valuable skills — and get paid for them?

“What about the control issue?” you ask. Wouldn’t the seller and buyer find a sneaky way to get out of paying the fee once they got together? (I’d retort, “And they don’t now?) It’s been my experience that far fewer people haggle with professionals whose performance is incumbent upon a high-skill level (like a brain surgeon, or a CPA defending you against the IRS) especially when the skills can’t be duplicated by automation or technology. That professional has a much easier time getting paid and perfecting a niche as an invaluable, and necessary piece of the business puzzle in the new millennium.

OUR SKILL MODEL IS UPSIDE DOWN!

In fact, when you look at what we charge for (showing the house, servicing the seller, driving buyers around) it’s no wonder our industry is in a state of turmoil. If you turn the skill model upside down, we should be giving away what we’re perceived as charging for, and vice- versa! For example, instead of “throwing in” the negotiating and advocacy services and burying them deep in the added-value aspects of working with an agent, we should reframe them, prioritize them, and CHARGE for them! (Wow — what a novel concept — getting paid for our skills!) Contrarily, we should avoid, delegate, and/or reprioritize those activities (like showing property, driving buyers around, etc.) that could be performed by the seller, a licensed personal assistant, or a chauffeur. (When was the last time you saw your attorney escorting his client to court?) Then, and only then, will our skills be taken seriously and adequately compensated.

ONE SOLUTION: REINVENTING OURSELVES AS CONSULTANTS

WHAT  CONSUMERS’  WANT  AND  DON’T  WANT  FROM  US

Consumer Reality #1: Sellers don’t care about service.  If working with an agent didn’t result in a successful sale (i.e. generate results) service was valueless.

Consumer Reality #2: Our skill model is upside down.  When asked what segments of the agent’s skills/services were deemed most valuable to the consumer, 85% rated the CMA (Comparative Market Analysis) as the most vital tool—far overshadowing the obvious people-related, strengths of negotiating and counseling.  The industry lesson is that we have not properly showcased the value of one-on-one skills to the consumer; in other words, that which is not differentiated or constantly visible is discounted (like late-night negotiating with a buyer.)

Consumer Reality #3: Consumers want what they want, when they want it and will gravitate to the most cost-effective source to obtain it.  Why?  Because our “one-size-fits-all” approach to working with sellers and buyers is archaic and won’t allow consumers to access various segments of help they need in a timely fashion.  That’s why .com web start-ups are finding a receptive audience in real estate consumers and why for-sale-by-owners are burgeoning.

HOW   DO  WE  START  TO  UNBUNDLE  SERVICES?

The easiest target, fastest-growing target for unbundling services is also the most overlooked and under-serviced—FSBOs.  The buoyant real estate market of the past several years has drawn us to more lucrative targets for listings and sales.  But the prediction is that for-sale-by-owners will double in the next ten years to comprise as much as 40% of all properties for sale in the marketplace.  That’s a statistic to pay attention to.  And even if online services help FSBOs to lease signage, write ads, etc. there’s still money to be made offering those personalized services of negotiating, advocating, and troubleshooting the transaction.

DO  THE  MATH  AS  A  REAL  ESTATE  CONSULTANT

Crank out your calculator.  How many hours would it take to negotiate between the FSBO and a qualified buyer and monitor the sale to a successful closing?  My research shows a median timeframe of ten hours for these tasks.  What if the parties to the transaction were willing to pay you, say (for the purpose of example only) $150 per hour, capped at a maximum fee of $1,500?  And what if they’d give you a $500 retainer against that fee? (passed through your broker’s escrow account, of course.)  So on a 50/50 split with your broker, you’d gross $750 per FSBO  transaction as a consultant.  And if you closed just two of these assignments per month, that would be an extra $18,000 a year!  Certainly nothing to sneeze at and a professional activity that mixes well with commissioned-sales business.  (And don’t forget that satisfied FSBOs are an especially good source of recommending you to others.  After all, they’ve won, so they’re willing to help you win.)

EASE  IN  WITH  CONSULTANCY  AS  AN  ALTERNATIVE  CHOICE

 Yes, most real estate markets are booming (but predicted to soften.)  And, yes, it’s true, most of us would rather have a root canal than spend time hammering a FSBO to list.  But what if in lieu of listing, a consumer would choose to actually pay us for services rendered? Would that be worth the effort?

 Give it a try the next time you have the opportunity.  Offer it to a FSBO as an option to a formal exclusive listing (after receiving the blessing of your broker, of course.)   In my experience, you’ll receive one of two responses from the consumer:  1.  “Read my lips, I want to sell my house myself.”  Or,  2. “That’s interesting.  It could be exactly what I need.  How much will it cost?” 

WHAT  TO  CHARGE  &  HOW  TO  DECIDE

 Now for the question every one wants a panacea to—how much to charge.  The answer?  Ya gotta figure it out for yourself.  (Not what you want to hear; but truly what you NEED to hear.)   Why?  Because one of the beautiful things about being a real estate consultant is determining the TRUE value of your expertise.  We’ve long been slotted as “just another real estate agent, charging the same X percent.”  Now (using much more than fee differentiation) we can niche our market by being the best at a certain task while being rewarded in proportion to our ability—much like the CPAs and attorneys you refer business to.

 When deciding what to charge, you first must determine the:

1) skill level required to perform the service (broker, agent, licensed/unlicensed assistant?)
2) cost of any new training required to satisfactorily do the job;
3) per hour dollar-value of the person performing the task (allowing for a factor of  “lost opportunity” time that could better be spent doing or developing other higher-paid opportunities); and
4) block of time it would customarily take to perform the unbundled activity (including a factor for additional administrative or clerical assistance, cost of supplies, technology required, and more.)

ANALYZE  RESULTS

After performing this cost-analysis gyration, a broker/agent might find that it:

1) is unrealistic that a consumer would pay enough for the unbundled service to be profitable to the brokerage;
2) could work financially, but not with top producers; or
3) could make financial sense to begin the unbundling process with “troubleshooting-the-sale-services” for FSBOs, using existing administration personnel. 

The alpha and omega is the principal broker.  He/she not only makes decisions for the brokerage about whether unbundled services is a logical fit for the brokerage, but typically dictates the services offered and a range of fees for those services.

BOTTOM  LINE:  CONSUMERS  WILL  GET  WHAT  THEY  WANT

The good news is that consumers want what they want and will compensate experts who provide it to them.

The bad news is that real estate consumers want what they want and will gravitate to professionals who provide it.  And since the real estate industry is the last of  the financial industries to unbundle services, it’s merely a matter of time before empowered consumers vote with their feet, and their wallets, in the move to unbundled, results-oriented, cost-effective real estate answers.

Julie Garton-Good, DREI, is an international speaker and author of five books on real estate, most recently “The Frugal HomeOwner’s Guide to Buying, Selling, and Improving Your Home.”  The overview for her real estate consultant designation program, “Consumer-Certified Real Estate Consultant™” (C-CREC™) through the National Association of Real Estate Consultants® (NAREC®) can be found at www.juliegarton-good.com

 

Florida’s consumer confidence rises as economic fears ease

GAINESVILLE, Fla. – Sept. 30, 2009 – Belief that a national economic recovery is under way boosted Florida’s consumer confidence three points to 74 in September, according to a new University of Florida survey.

“I think Florida consumers are buying into the argument that the worst of the recession is over and we have avoided a complete meltdown,” says Chris McCarty, survey director of UF’s Bureau of Economic and Business Research. “Once again, they have surprised us with a higher-than-expected index.”

This month’s three-point rise follows a four-point revised increase in August. Of the five components that make up September’s index, three rose, one declined and one was unchanged. Perceptions of personal finances now compared with a year ago remained unchanged at 44, only five points above its all-time low of 39 in December. Expectations about personal finances a year from now fell three points to 81.

In contrast, perceptions of U.S. economic conditions over the next year rose three points to 75, while expectations about economic conditions over the next five years rose five points to 86. Perceptions of whether it is a good time to buy big-ticket items, such as appliances and cars, rose nine points to 84.

“It is worth noting that the two index components that gauge perceptions of personal finances both now and in the future are flat or down,” McCarty says. “All of the increase is in perceptions of future economic conditions, and in the perception that if you have the money, it’s a good time to buy.”

There are some signs that the economy is improving, he says.

Once again, the median price of a single-family home is virtually flat compared with the previous month, and up for the year, suggesting that housing prices in many areas of Florida have bottomed out, McCarty says. Although foreclosures are still high, the rate seems to be declining.

In other good news, inflation and, in particular, gas prices remain low overall compared with a year ago, McCarty says. In the past few years, gas prices have dominated the consumer confidence index. In addition, the stock market is still up for the year and at least for now appears stable.

“On the negative side, unemployment remains at 10.7 percent for Florida,” McCarty says. “This number is not expected to improve much until next year, and it could still get worse. Florida lost population this past year and could do so again as the underlying problems that prevent people from moving are still in place.”

Tourisms both domestically and internationally also are down as consumers trim discretionary spending, McCarty said. Programs such as Cash for Clunkers at least temporarily lifted retail sales, but sales tax revenues in Florida have dropped 10 percent from a year ago.

“In the near term, we expect consumer confidence to decline at least a point or two as the holiday season nears and stimulus programs like Cash for Clunkers and rebates for first-time home buyers expire,” he says. “The discussion about health care reform will be at center stage this fall, and may affect confidence if the plans involve increased payments from the middle class.”

Also of economic concern is that, at some point, extended unemployment benefits will run out, putting more pressure on the unemployed. In the long term, consumers need to be prepared for the inevitable drawing back of stimulus money from the economy, McCarty says.

The U.S. government effectively printed money to avoid a depression, and at some point most of the money will have to be withdrawn from the economy to avoid inflation and a very weak dollar, McCarty says. When that happens, interest rates will rise dramatically.

“We also have to think about how the Florida economy will adjust moving forward,” he says. “It is likely that discussions about off-shore drilling will receive much more attention as Florida looks for industries to replace those dependent on population growth.”

The research center conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for September was conducted from 412 responses. The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year.

© 2009 Florida Realtors®

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ORLANDO, Fla. – Aug. 31, 2009 – International home buyers make up a significant part of the Florida real estate market, and are an important part of many Florida Realtors®’ businesses. According to a study conducted for the Florida Association of Realtors® (FAR) by the National Association of Realtors (NAR), a majority (54 percent) of Florida Realtors worked with an international client within the past 12 months.

The typical Florida Realtor participating in the survey worked with three international clients; 10 percent of respondents worked with 11 or more international clients in the past year.

Not all client interactions result in a transaction. In the past 12 months, 34 percent of Realtors who worked with international clients reported that none of their international clients purchased a home. However, this does not mean that those international clients will not ultimately buy in Florida.

Other study highlights:

• 86 percent bought an existing home, while 14 percent opted for a new home.

• 52 percent chose a single-family detached home. Of the rest, 34 percent chose a condo, 76 percent a townhome, and 7 percent “other.”

• One in four buyers (27 percent) bought a home in South Florida, while Bradenton-Sarasota-Venice and Orlando attracted 11 percent each. However, one-third (32 percent) of foreign buyers purchased a home outside Florida’s top six metropolitan areas.

• One-third of buyers (35 percent) who eventually decided to walk way did so, at least in part, because of property tax costs; while 31 percent cited immigration laws that prevent year-round residence. While Floridians balk at the cost of property insurance, however, only 20 percent of immigrants listed that as a reason to walk away.

 2009 Florida Association of Realtors

Good news about housing and stocks lifts Florida’s consumer confidence

GAINESVILLE, Fla. – Aug. 26, 2009 – Rising housing prices, stock market gains and the lack of any new setbacks in the national economy boosted Florida’s consumer confidence three points to 70 this month, according to a new University of Florida (UF) survey.

“We had anticipated an increase in consumer confidence in August based on what appeared to be an unjustifiable two-point drop in July following what was already a two-point decline the previous month,” said Chris McCarty, survey director of UF’s Bureau of Economic and Business Research. “While the economic environment is by no means bright, the decline in July seemed unsustainable given the lack of any very bad economic news and some encouraging signs in Florida’s housing market and the stock market.”

Three of the five components in the index rose, one fell and one stayed the same. Perceptions of personal finances now compared with a year ago remained unchanged at 43, still only four points above its all-time low of 39. Perceptions of U.S. economic conditions over the next year jumped 10 points to 73; perceptions of U.S. economic conditions over the next five years rose eight points to 80; and perceptions of personal finances a year from now increased five points to 84. The only component to drop was perceptions of whether it is a good time to buy big-ticket items, which fell five points to 72.

“We are not out of this recession yet, particularly here in Florida, but things are not nearly as bad as they were a year ago,” McCarty said.

Home sales have picked up both nationally and in Florida, and falling prices suggest a bottoming out of the housing slump, McCarty said. The latest report from the Florida Association of Realtors® shows median prices for existing single-family homes flat from last month and still up for the year.

If foreclosures continue, they could depress home prices, McCarty said. The Mortgage Bankers Association has reported that 23 percent of Florida mortgages in the second quarter of 2009 were either in foreclosure or late on payments.

The hardest hit area for foreclosures is along the southwest coast, including Fort Myers, Sarasota and Punta Gorda, all of which are disproportionately dependent on retirees, McCarty said. A slowing of the retiree housing market is a big factor in Florida’s population decline last year for the first time since 1946, which the bureau reported last week, he said.

“We expect consumer confidence to stay mired in the upper 60s and low 70s as the recovery develops,” McCarty said. “Unfortunately, while Florida housing is showing signs of improving, the overall state economy in the long run will likely lag other parts of the country given the prospects for a turnaround in employment.

“As the country moves into recovery over the next year, real estate, construction spending and tourism – all of which have been major sectors in Florida economy’s over the past two decades – will certainly stabilize, but not grow as they had,” he said. “Florida needs a new approach.”

The research center conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for August was conducted from 425 responses. The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year.

© 2009 FLORIDA ASSOCIATION OF REALTORS®

Office prices rise for the first time in two years

NEW YORK – Aug. 24, 2009 – The sale prices of U.S. office properties rose 4.3 percent in the second quarter, the first increase since the second quarter of 2007, according to a report from ratings agency Moody’s.

The second-quarter increase is significantly different from what happened in the first quarter when office prices fell 18.6 percent. Neal Elkin, president of Real Estate Analytics, said he was convinced the second-quarter increase isn’t just a temporary blip.

He said the improving economy is luring investors to commercial property and persuading companies to reconsider occupancy projections as office prices start to look cheap.

Overall, Moody’s said commercial property transactions in June rose by 50 percent from May and that the total transaction volume more than doubled.

Source: Financial Times, Alan Rappeport (08/20/2009)