Amelia Island/Nassau County, FL – July 2012
A few short years ago, housing was considered a headwind to economic recovery. Today, housing is seen as a tailwind to a stalling economy. For the first time since 2005, housing is on track for contributing positively to national GDP in 2012. That can occur either by way of direct residential investment or through remodeling and other ancillary services. Watch for signs of sustained tailwinds in a variety of indicators including market times, seller concessions, prices and absorption rates.
Though many home shoppers who assume they are still in a buyer's market find it hard to believe, one of the sobering fundamentals shaping real estate this summer is shrinking inventory. The supply of houses for sale is down significantly (-17% in our area) in most areas compared with a year ago. And that is having important side impacts such as raising prices & homeowners' equity stakes and reducing total sales. Although we are seeing some increased sale prices compared to like properties, those are the exception rather than the norm as most sales are subject to appraisal and loan approval.
In Nassau County, pending sales increased 39% from July '11 to July '12 for single family homes and 600% for townhouse/condo properties. In terms of actual numbers, there were 2 condos pending in 7/11 and 14 pending in 7/12, thus the 600% increase. Still, an improvement, and one the condo market was desperate to see.
The median sales price was up 39.4% to $240,000 for detached homes and 4.8% to $285,000 for attached properties. Again, more high end home are selling compared to last year, increasing that statistic, rather than increasing prices. Specifically, there were 9 sales above $1,000,000 in 2011 (January - August) and 19 for the same period in 2012.
Most striking of all is the absorption rate. The turnover rate which foretells how long a property might take to sell. Those numbers dropped a staggering 56.3% for single family homes and 23.3% for townhouse/condo units when we compare July 2011 to July 2012.
Sustained recovery will not occur without real employment and wage growth. Consumers must be confident in both the economy and their family finances before signing on the dotted line. Cheap borrowing costs have served as the glue biding things together. Unimaginable a few years ago, the rate on a 30-year fixed mortgage recently ducked below the 3.49% marker. Job creation and GDP numbers will garner particular attention this quarter.
All data from Amelia Island - Nassau County Association of REALTORS MLS
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