In the third year of our down real estate market, we are all wondering if the end is in sight. Certainly, when the real estate market bounces back, Sanibel & Captiva Islands will lead the charge. Certainly this week’s announcement of the government takeover of Fannie Mae and Freddie Mac means things have to get better. And certainly once we get through the election year, people will reevaluate their financial goals and look to purchase some of the incredible deals currently available. But what will happen to prices?
Many sellers feel that immediately after the pendulum starts to swing up, we will be back to the golden real estate years of 2004-2005. In fact, a lot of prospective sellers are waiting for the media to make this announcement so they can re-list their properties for sale. The reality is, however, that our market needed to make an adjustment, and the most recent sales prices in our market are the best comps for our properties. In almost every subdivision or condo complex, there has been at least one sale where the neighbors thought the seller priced the property too low. But did they?
This year on Sanibel, 124 single family homes have sold and another 13 are pending. While this number represents less than 60% of the number of homes sold in the peak (bubble, frenzy, etc...), it is an increase over the number of sales during the same time last year. The average price is down ten percent from last year and 20% from the bubble, but the average sales price is up almost nine percent from 2004. In other words, our market is performing just fine, relatively speaking, unless you are trying to sell a property you purchased in the last three years. This has always been the case with real estate as it should be considered a long term hold. Houses are selling, but they are selling at the current market value. The demand has not subsided, but rather buyers are less emotional and more pragmatic with their offers these days. We always knew the market would pick up when the prices readjusted and the inventory shrank. Well, the number of houses on the market is down 25% from March 2008. And yes, we will surpass our (number of) sales from 2007 this year. Condos are following the same trend, but the prices still need to be adjusted. Condo buyers are looking at cash flow with the hope that the rental income will offset the operational expenses. Although a lot of sellers think the most recent sales have prices too low, the average sales price is still up 15% percent from 2004.
The real estate market is alive and kicking. The pendulum has changed directions on Sanibel and Captiva. The buyers are bringing their checkbooks and they will be here this winter. Those properties priced right will sell. So as you work with your Realtor to determine the best price for your property, take a look at comparable sales from 2008, not 2005. This is reality!