91.4

No, we’re not talking about the temperature, though that’s probably it! Actually, what we’re referring to is the list to sell ratio for May of 2008 in Vero Beach. Listings sold for an average of 91.4% of the asking price. Our buyers need to understand that the majority of homes are priced correctly. Prices have rolled back dramatically from the top of the market. Interest rates are low, and educated buyers are making great deals on Vero Beach Real Estate.

Click here for recent sales in Vero Beach.

In Trulia Trends, Vero Beach Real Estate is #2 in Price Movers with a reported 8% increase in median prices last month. Vero Beach weathered the housing bath well thanks to higher median incomes, more builder restraint during the boom years and fewer unsold units today.

The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now, including Vero Beach Real Estate.

How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won’t happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor.

Most people forget that the current housing bust is nearly three years old. Home sales peaked in July 2005. New home sales are down a staggering 63% from peak levels of 1.4 million. Housing starts have fallen more than 50% and, adjusted for population growth, are back to the trough levels of 1982.

Furthermore, residential construction is close to 15-year lows at 3.8% of GDP; by the fourth quarter of this year, it will probably hit the lowest level ever. So what’s going to stop the housing decline? Very simply, the same thing that caused the bust: affordability.

The boom made housing unaffordable for many American families, especially first-time home buyers. During the 1990s and early 2000s, it took 19% of average monthly income to service a conforming mortgage on the average home purchased. By 2005 and 2006, it was absorbing 25% of monthly income. For first time buyers, it went from 29% of income to 37%. That just proved to be too much.

Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the bubble to burst.

For the complete article, visit the Wall Street Journal

Several markets across the country are starting to heat up — if you know what to look for. Take across Florida — prices are depressed, sales are down in the double digits compared to a year ago, while foreclosures and short sales rule. However, it’s turning and the smoke is starting to rise before the flame ignites. Across Florida, the inventory was skyrocketing over the last two years, and now those numbers are dropping. At the same time, the sales reported month after month are increasing in the high double digits.

Where can you see the smoke? In the numbers that rise or fall before sales and prices jump – pending sales, inventory, and absorption rate.

Consider these cities: In the Greater Fort Myers area, pending single-family home sales are up 85 percent in just the last 10 weeks, according to the Realtor Association of Greater Fort Myers. Meanwhile, the absorption rate has dropped to half of what it was just four months ago to a 12 month supply.

Click here to read the full post…

Cheap Dollars & Large Inventories Mean Vero Beach Bargains for Foreign Buyers

With the U.S. dollar at its weakest level in decades, international buyers are chasing housing bargains in Vero Beach, eager to take advantage of their purchasing power and the declining prices in some of the best-known U.S. cities.

The Washington Post reports “The impact of the weak dollar on foreign demand is one of these market forces that has snuck up on us,” said Jonathan J. Miller, chief executive of Miller Samuel, an appraisal company in New York. “It’s been gradually gaining momentum, and the demand has accelerated as the fall in the dollar has accelerated.”

A study last year by the National Association of Realtors confirms that 25 percent of real estate agents surveyed in summer 2007 said they had more business from international clients than they did five years ago. The weak dollar was cited as one of the reasons for the uptick.

About 26 percent of foreign buyers ended up in Florida and another 16 percent in California, with Texas in third place. And more than a quarter of the foreign buyers bought their homes with cash, and when they took out loans, they put down more money than domestic buyers, the study found.

Click here for the full story…

20 Market Positives

Let’s take a look at some of the opportunities and positive indicators for the future of the Vero Beach Real Estate market.

1. Long-term economic and demographic trends continue to favor Vero Beach Florida. By 2010 it has been forecast that Florida will be the third most populated state in the country. Florida’s population is expected to increase about 75 percent by 2030. Florida demonstrates a long history of strong growth. It has been one of the 10 fastest-growing states in the U.S. for each of the past seven decades, and often it has been in the top four, according to census data. Population growth will continue to provide a foundation for other economic growth such as new jobs and growing incomes. All of which is good for real estate.

2. People are continuing to move here. It’s estimated that 1,000 people move here every day (www.stateofflorida.com, “Florida Quick Facts”). No wonder Florida’s population has grown 13.4% since 2000, compared to only 6.4% for the rest of the country, according to census data.

3. Five of the top 15 cities in the Milken Institute’s 2007 “Best Performing Cities” survey, which looks at sustainable economic growth, are in Florida, including the No. 1 city, Ocala. A total of 13 Florida cities are in the top 50.

4. Low unemployment. Almost 120,000 jobs were created in Florida in the year between August 2006 and August 2007. Florida’s unemployment rate has hovered at or under 4% for a long time; and was 4% in August 2007, according to the latest data available from the U.S. Department of Labor. That not only puts it well below the national unemployment average, it also is the lowest unemployment rate among all ten of the most populous states.

5. Jobs are plentiful, and that trend will continue. A recent study by Bizjournals called “Where the Jobs Are” found that 7 of the hottest 15 job markets are in Florida.

6. Let’s take a look at the weather. If you think the hurricanes we experienced are going to have long-term effects on the Florida real estate market, consider this tidbit from Fortune Magazine. It recently reported, “Economists and geographers who have studied how natural disasters affect real estate values have generally found there to be no lasting impact.” Example #1: When Hurricane Hugo hit Charleston, S. C., home values were actually higher one year later. Example #2: That same year, 1989, a huge earthquake made big news in San Francisco, and the same thing happened—house prices went up.

7. Grant Thrall, a professor of what’s called Economic Geography, explains this phenomenon this way—residents move away and home prices fall only when natural disasters start becoming regular occurrences in an area, not when they happen periodically. And while the hurricane seasons of 2004 and 2005 may still be fresh in our minds, the fact is, historically it was a fluke. Eight storms hit the Florida mainland in those two years. But if you look back at the 50 years prior, only six Category 3 or higher storms hit the Florida mainland in half a century.

8. Gov. Charlie Crist, state lawmakers and business groups are committed to finding real solutions to the escalating costs and shortage of property insurance in Florida, as well as much-needed property tax reform. Florida Realtors will continue working closely with lawmakers to help resolve these complicated issues and keep the state’s economy moving forward. For example, 2007 FAR President Nancy Riley sits on the governor’s property tax reform commission, and 2005 FAR President Frank Kowalski served on the governor’s insurance reform commission.

9. Interests rates currently are still low, on a par with interest rates in the 1960s. And thanks to the Fed’s recent rate cut, we’re already seeing lower rates on home equity and mortgage loans, including jumbo loans. The Fed’s action effectively increases the number of homebuyers able to make a purchase, which should increase demand, and also help support home prices. Home prices continue to stabilize, inventory is plentiful and homebuyers have lots of options.

10. Homeownership has value: Realtors believe… and research supports that belief … that homeownership provides a variety of benefits, tangible and intangible, to the community as well as the individual homeowner.

11. Studies show that home equity is still the largest single source of household wealth, both for the individual homeowner and for homeowners as a group. Home value is the most important single aspect for homeowners.

12. Owning a home leads to increased personal well-being. Research shows that people who own their own homes tend to show higher levels of personal esteem and life satisfaction, which in turn helps to make homeowners and their children more productive members of society.

13. Studies show that children raised in homes owned by their families are more likely to stay in school and more likely to graduate high school. They’re also shown to have a higher lifetime annual income.

14. People who own homes have a strong financial stake in what happens to their community and tend to become more involved in community and civic affairs. Studies show that homeowners also interact with their neighbors to gain wider influence over their neighborhoods and communities.

15. Homeowners join up to 41 percent more civic and/or nonprofessional organizations than renters, such as the PTA or Scouts; vote in local elections 15 percent more often; enhance their neighborhoods with gardens 12 percent more often; attend church about 10 percent more often; and have a 3 percent greater chance of being interested in public affairs.

16. 2007 Florida Association of Realtors® (FAR) President Nancy Riley says, “Florida Realtors know buying a home is a very personal investment – an investment in a family’s future. Although research shows it is the largest single investment most families make and helps to provide security for the future, owning a home isn’t just a financial investment. Ownership is about having a place to call home: a place where families build a future and become part of a community.”

17. Over the past five years, the average homeowner has seen an increase of 50 percent in value, according to the National Association of Realtors® (NAR). Here in Florida, the statewide median home price has shown an increase of 52.5 percent from November 2002 to November 2007, according to FAR records. NAR housing industry analysts project that prices will rise about 2 percent next year, and in coming years, average home price appreciation should return to historical averages of around 6 percent.

18. Florida is a great place to live and work. According to Enterprise Florida Inc., the Sunshine State has one of the nation’s strongest tourism industries; it is fourth in the nation in high-tech jobs; is the third largest exporter of high-tech goods and services; and is ranked as one of the best states in the nation to be an entrepreneur.

19. Orlando-based economist Dr. Hank Fishkind recently said in several media reports he believes that “the worst of the so-called housing crisis has probably been mitigated by the actions of the Fed. Recovery will take a while, but it has begun.” Another economist, Dr. Lawrence Yun, chief economist with the National Association of Realtors, predicts that the Florida housing market will get stronger in 2008 and will be booming again by 2010.

20. And let’s not forget the things that brought people to Florida in the first place, and will continue to attract them – beautiful beaches, fabulous weather and a friendly business climate, with no state income tax. It’s no wonder that Florida’s combination of temperate climate, outstanding recreational amenities and economic opportunity has consistently put us at the top of Harris Poll’s “most desirable places to live” survey.

Market Expected to Recover from Indigestion

A new report released today by Attorneys’ Title Insurance Fund Inc. (The Fund) and posted on www.MyRealEstateStory.com finds that Florida’s housing market slowed in 2007 in nearly every county analyzed. The report also shows that real estate markets flattened out in spring 2007, before the subprime mortgage crisis in August knocked markets down another 10 percent across the state. Since then the housing market has flattened and is expected to begin to recover during the next several years.

The 2008 Fund Real Estate Forecast, commissioned by Florida-based Attorneys’ Title Insurance Fund’s Consumer Education Campaign, was created by economist Hank Fishkind, Ph.D. of Fishkind & Associates, Inc., using The Fund’s extensive online system of deed data for more than 30 Florida counties. The report provides a snapshot of the national economic outlook and 33 county-specific forecasts for 2008 through 2010, as well as a section detailing how actual 2007 data compared to projections that were made in last year’s Fund 2007 Real Estate Forecast report.

“Florida is one of the leading states for job creation and outperformed the rest of the country despite the housing market meltdown,” stated Fishkind. “The state’s population growth also slowed, but is still nearly greater than all of the other Southeastern states put together. Florida has a very large and powerful economy that has gone through a cyclical downshift, but it is still outperforming compared to the rest of the nation.”

The Fund’s 2008 Real Estate Forecast shows that Orlando continues to be the strongest residential real estate market in the state because of its large share of fast-growing industries, such as tourism, healthcare, education and defense manufacturing. Not all markets in Florida mirror Orlando’s resiliency, however. Miami-Dade is currently going through the worst condominium bust cycle that Florida has seen since 1975. Additionally, significant excess supply of single-family homes in the Fort Myers and Cape Coral markets will not begin to be absorbed until 2010.

“With Florida’s real estate market, it is important to maintain some perspective as recent reductions in home prices come after a very lofty and unsustainable peak, and prices are still up considerably compared to 30 years ago,” explained Fishkind. “Florida has created a tremendous amount of wealth and – despite many of the problems that loose lending practices and subprime mortgages have caused – the state now has the highest level of homeownership ever. The market has some indigestion now, but housing markets will return to normal during the next few years; the damage for some is significant, but in the aggregate, Florida still had some significant economic gains.”