The decline of Real estate values across America has affected the price of homes in virtually every city in America. Homes in many areas are now being offered at prices that have not been seen for years.

Stories about the bursting housing bubble look for an explanation. These stories point to the lack of available credit that has in turn resulted in a lack of financing for real estate, they point to a faltering economy with major job losses being announce every month, they point to a lack of buyers and describe a real estate market that was overbuilt and over priced that was spurred by easy credit and over-zealous buyers and sellers. Whatever the reason, the simple fact is, there has been a serious erosion of value.

While the market might be priced right for buying that second home in the US, it is still important to realize that looking for the house that fell the most in value may not be the right path to finding the best value. In fact, you might find that the home with best value is not in an area that has been crushed.

“The three most important words in real estate are; location, location and location!”
Will Rogers

This is sage advice and it still holds true today. The very first thing that you should want to determine in your search is the location for your second home. We receive calls every day from people that simply say; “I want a place in Florida.” Well, Florida is a pretty big state and has a lot to offer so it is important to be able to narrow that search down to at least a city and then to at least a neighborhood.

“It’s how you live!”
Artist - Point of Grace

Almost everyone will agree that where you want live is important, but how you want live will eventually weigh heavy on your final choice. When you are looking for that second home, you should be able to list the amenities and activities that are important to you.

“If it sounds too good to be true, it probably is”
Quote: Almost everyone you know!

There are not that many things that actually reflect their true value like real estate does. The value of real estate is constantly in flux and determined by a cocktail of influencing factors. There are indicators that are easy to find that will report on the market; like amount of time it will take for the current demand to absorb the current number of homes that are being offered for sale, the average number of days that a home is staying on the market before it is sold and the relationship between the asking price and the selling price of the home. There are other factors like the actual price of the home, the availability of financing and the total monthly cost of ownership that also influence the demand and eventual value of a home. The condition of the local economy will also influence the value of a home. Is the local economy creating jobs or losing jobs and what kind of paycheck is associated with the jobs that make up the work force? There is a lot to take in.

The bottom line is that just because the price of a home has fallen to an all time low does not make it a great buy. Location is still the most important factor when you are searching for that second home

By: Harold Green

Central Showplace

The Pending Home Sales Index in the South rose 8.5 percent to 93.2 in March and is 7.7 percent above a year ago. In the West the index increased 3.9 percent to 93.1 and is 1.7 percent higher than March 2008. The index in the Northeast fell 5.7 percent to 59.5 in March and is 24.1 percent below a year ago. In the Midwest the index slipped 1.0 percent to 82.3 but is 8.2 percent higher than March 2008.

The National Association of Realtors Pending Home Sales Index, based on contracts signed in March, rose 3.2 percent to 84.6. February’s pending home sales index was slightly revised down to 82.0 from 82.1. Compared to the same period a year ago, pending home sales rose 1.1 percent.

First-time homebuyers looking for bargains snapped up about half of all homes sold last month. Much of this is attributed to first-time buyers taking advantage of favorable affordability conditions, including an $8,000 tax credit.

“Homes are more affordable than they’ve been in years and mortgage rates are near record lows”, said Lawrence Yun, the National Association of Realtors chief economist. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around,” said Yun.

The median sales price in March was $175,200, higher than February’s median price of $168,200.

The National Association of Realtors (NAR) estimates that distressed sales have accounted for 45 percent of existing home sales in recent months, which is one reason why prices have fallen so sharply. The combination of falling home prices and lower mortgage rates has made home ownership much more affordable. The NAR Housing Affordability Index has surged more than 50 points over the past 6 months and is at an all-time high.

In Florida, nearly two-thirds of all sales are foreclosures and short sale properties, many of which are not counted by real estate agents since they are sold at auction or by banks directly to home buyers.

A study conducted by the National Association of Realtors (NAR) for the Realtor Association of Greater Miami and the Beaches (RAMB) provides a profile of homebuyers in Miami-Dade and Broward counties.  The 2008 Profile of Home Buyers and Sellers provides a comparison of the current state of the South Florida real estate market, and how it compares to the rest of the state and the nation.

• A significantly higher number of South Florida home buyers were born outside the U.S.  44 percent of South Florida buyers were not born in the U.S. compared to 17 percent in Florida and 9 percent in the U.S.
   
• The median age of South Florida homebuyers is 41 compared to 43 in Florida and 39 for the entire U.S.  For first-time homebuyers, the median age in South Florida is 34 compared to 32 in Florida and 30 for the entire U.S. 
   
• The 2007 median household income of homebuyers in South Florida was $74,000 compared to $68,500 in Florida and $74,900 in the U.S.

The U. S. Sunbelt states have a well-known history of attracting large numbers of domestic and international tourists along the U. S. coastline.

Tourists have several available options when it comes to their choice of accommodations, ranging from hotels and motels to the luxury condominiums and resorts.  For families, providing accommodations over a extended vacation, hotels and resort daily rate cost become significant. A growing trend is to choose Short Term Vacation Rentals.

Short Term Vacation Rentals typically offer accommodation by the week or by the month and are generally located in the heart of vacation destinations which have access to local amenities and attractions like the beaches that line the coast of the Carolinas or the Gulf Coast as well as the vacation hot spots like Orlando’s Disneyland Resort or Galveston’s Moody Gardens.

Instead of renting a hotel room for mom and dad, a room for the kids and a room for the grand kids, the extended family rents a three or four bedroom vacation home.  When you do the math for three or four hotel rooms, diners out and add a collection of rental cars, it is easy to see how quickly the costs jump up and how attractive a $3,500 a week vacation home can become.

THE VACATION RENTAL MARKET

The future for Short Term Vacation Rentals is bright. 

The Recent Vacation Rental Management Association (VRMA) has compiled research that confirms that the vacation rental industry is in fact growing and becoming more professional and competitive as more and more products are brought online to provide more and more opportunities for vacationers find that vacation home for the family.

VRMA also reports that the inventory of short term vacation homes that are being offered for rent is increasing every year.  As more second homes are purchased, more short term leasing opportunities are being created.  Obviously a second home owner will not want to enter into a long term lease, so their only opportunity to benefit from owning a second home is to rent it for a short period of time.

There is data confirming the fact that more and more of the second homes are being purchased for use by homeowners and that these homes are also being rented out or used as investments.

As a result, there is a growing market of second homeowners that are seeking out properties that have quality vacation rental management firms that can provide rental services and property management in place.

When you research the second home and the Short Term Vacation home industry, it is pretty easy to confirm this trend.  Almost all of the data you will find will confirm that the inventory of short term rental homes is continuing to rise in many of the destination vacation real estate markets where second homes are being purchased.

VRMA also reports that the income from vacation rental operations is continuing to rise as the Short Term Vacation Property become a more recognized and sought after alternative.

MANAGED OWNERSHIP SOLUTION

Owning a well located, professionally managed, short term furnished vacation property provides an excellent opportunity for Canadians to enter into the US Real Estate market.  The fact that the lease term is short and that the stay is being compared to hotels and resorts increases rents to a point where properties can break even when they are only rented out half a year or so.

This is the ideal situation for a Canadian that would like to rent out their property in the summer in the high season and vacation down south in the winter avoiding the sleet and snow of our winters.  They will quite often be able to manage a scenario where they will be able to stay for a few months for free.

Central Showplace is featuring buying opportunities of short-term rental properties of two, three and four bedroom furnished condominiums and homes that are located in the heart of tourist hotspots and that are ideally suited for families who want to vacation together. 

Harold Green

Central Showplace

Sarasota Association of REALTORS Press Release:

*The following press release was sent to local media on April 16

The Sarasota real estate market saw sales rise to the highest level of the year in March 2009, besting the previous month by 33 percent. In addition, the median sales price for single family homes rose after steadily declining since late last year, indicating a potential sign of the bottoming of the local market.

The overall sales level of 481 was the highest since June 2008, and nearly equaled the level of 504 sales reported in March 2008. Of those sales, 353 were single family homes while 128 were condominiums.

The good news also extended to pending sales, which once again rose in March 2009 to 817. The last time pending sales climbed over 800 was in March 2006, when pending sales also were reported at 817. The total of 817 was 21 percent higher than the 679 pending sales reported in March 2008.

According to statistics from the Mid-Florida Regional MLS for members of the Sarasota Association of Realtors®, 645 single family homes and 175 condominiums went under contract in March 2009, compared to only 471 homes and 208 condos in March 2008.

Pending sales have now exceeded the 500 level for the 15th consecutive month, and the statistic bodes well for the next two or three months, when many of these pendings will become closed sales. Pending sales reflect contracts executed by buyers and sellers during the month. The report continues to reflect a steady, strong pattern, and indicates buyers are more active in the Sarasota market even in the face of difficult economic times.

“We believe the current climate of historically low interest rates, major incentives for first-time homebuyers, and the many other government programs designed to stabilize the economy and the housing industry is all having a very positive impact,” said 2009 SAR President Bill Geller. “Every downturn is followed by an upturn - we know this to be true historically. We’ve been through a difficult time in the real estate industry, and hopefully we are seeing the beginnings of a new, dynamic era.”

The recently enacted first-time homebuyers’ tax credit of $8,000 will likely continue to boost sales this year, Geller said. Those who meet eligibility requirements and purchase a home this year prior to Dec. 1 are eligible for a tax credit of up to $8,000, and unlike the 2008 tax credit, this one does not have to be repaid.

The median sale price for single family homes rose to $152,125 in March 2009 from $142,000 in February 2009 - a 7 percent increase. The median sales price for condominiums fell to $166,750 in March 2009 from $198,000 in February 2009, for a 15 percent drop.

The median price of all single family homes sold in the last 12 months was $217,000, compared to a median of $299,900 for the 12 months ending in March 2008. For condominiums sold in the last 12 months, the median sales price was $256,000, compared to last year’s figure of $295,000.

Another important market tracker - the absorption rate of properties on the market - continues to track lower than last year at this time for both single family homes and condominiums, as inventories have declined. Absorption rate is the number of months it would take to sell the entire remaining listed inventory in a particular category, based upon the sales for that particular month.

For March 2009, the absorption rate for single family homes stood at 17.1 months, compared to 24.1 months the previous month and 25.1 months in March 2008. For condominiums, the absorption rate was at 21.2 months, lower than the 28.5 months in the previous month, and much lower than the 34.1 months reported in March 2008.

*A 12-month rolling median price is not as susceptible to the volatility that can occur within any particular month, which sometimes results in drastic statistical swings up or down from one month to the next.

Download the full report

Palm Beach County home prices continued to fall in February, but sales spiked as bargain hunters snapped up foreclosures and short sales, the Florida Association of Realtors.

The median price of a single-family home in Palm Beach County was $228,100, down 34 percent from a year ago. However, 532 homes sold during the month, up 33 percent from a year ago.

Buyers are targeting lower-priced homes that sell for far less than they fetched in 2005 and 2006. “Bargain properties are selling, but expensive Palm Beach County’s homes attract few buyers”, said Steven Presson, an agent at Corcoran Group Real Estate in Palm Beach.

ORLANDO, Fla., March 23, 2009 /PRNewswire via COMTEX/ —-Florida’s existing home sales rose in February, making it the sixth consecutive month that sales activity showed increases in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors. February’s statewide sales also increased over January’s figures in both the existing home and existing condo markets.

Existing home sales rose 20 percent last month with a total of 9,858 homes sold statewide compared to 8,181 homes sold in February 2008, according to FAR. February’s statewide existing home sales were 16.7 percent higher than January’s statewide sales.

Florida Realtors also reported a 15 percent gain in statewide sales of existing condominiums in February, continuing a trend in recent months for higher statewide sales of both the existing home and existing condo markets compared to year-ago levels. Statewide existing condo sales last month increased 25.1 percent over the total units sold in January.

Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in February while 11 MSAs also showed gains in condo sales. It marks the eighth month in a row that a number of markets have reported increased sales.

Florida’s median sales price for existing homes last month was $141,900; a year ago, it was $199,300 for a 29 percent decrease. Industry analysts with the National Association of Realtors(R: 31.39, -0.18, -0.57%) (NAR: undefined, undefined, undefined%) report a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in January 2009 was $169,900, down 13.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $254,350 in January; in Massachusetts, it was $321,000; in Maryland, it was $244,820; and in New York, it was $205,000.

Significant variations in local markets continue, according to NAR’s latest housing outlook, which also notes that it will take time for the impact of the economic stimulus to show in housing data. “Some markets appear to have reached the tipping point of accelerating home buying,” said NAR Chief Economist Lawrence Yun. “Improvement from the economic stimulus isn’t likely to show as closed home sales before summer, although we may see an earlier lift from lower mortgage interest rates.”

NAR analysts estimate the impact of the federal economic stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package. By the end of the year, NAR expects inventory to fall below an eight-month supply, which would be consistent with home price stabilization.

In Florida’s year-to-year comparison for condos, 3,198 units sold statewide compared to 2,785 sold in February 2008 for a 15 percent increase. The statewide existing condo median sales price last month was $109,300; in February 2008 it was $173,900 for a 37 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $174,400 in January 2009.

Interest rates for a 30-year fixed-rate mortgage averaged 5.13 percent last month, down significantly from the average rate of 5.92 percent in February 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s medium-size markets, the Fort Pierce-Port St. Lucie MSA reported a total of 372 homes sold in February compared to 263 homes a year ago for a 41 percent increase. The existing home median sales price was $122,100; a year ago, it was $172,900 for a 29 percent decrease. In the year-to-year comparison for the existing condo market, a total of 71 units sold in the MSA last month, up 22 percent compared to 58 condos sold the previous February. The market’s existing condo median price was $116,700; a year ago, it was $126,700 for an 8 percent decrease.

Two charts showing statistics for Florida and its 20 MSAs are attached. One chart compares the volume of existing, single-family home sales and median sales prices in February 2009 to February 2008 based on Realtor transactions; the other compares the volume of existing, condominium sales and median sales prices in February 2009 to February 2008 based on Realtor transactions.

The Florida Association of Realtors, the voice for real estate in Florida, provides programs, services, continuing education, research and legislative representation to its 125,000 members in 67 boards/associations.

SOURCE Florida Association of Realtors

According to a report by the National Associations of Realtors (NAR) on Feb 12, 2009, the median price of single-family home resale in 88 percent of the United States’ metropolitan areas trended down in the fourth quarter 2008 from a year earlier. 45 percent of the transactions in this quarter were distressed sales, foreclosures and short sales, which lead to the decline in the median price. The most significant price drop occurred in Florida, Michigan, California and Arizona.

Nationally, the median price for single-family homes dropped 12.4percent year-over-year in the fourth quarter. Regionally, the median home prices dropped 25.1 percent in the West, 10.6 percent in the Midwest and 7.5 percent in the South and 4.7percent in the Northeast.

NAR President Charles McMillian pointed out “distressed home sales have risen from about 38 percent of transactions in the third quarter, meaning people are responding to discounted prices and are slowly absorbing the excess inventory. Buyers clearly see value in today’s pricing.”

Lawrence Yun, NAR chief economist reported the largest gain in sales volume for the fourth quarter was in Nevada, up 133.7 percent, followed by California, rose 84.7 percent, Arizona, up 42.6 percent and Florida with a 12.5 percent increase.  This is a clear pattern that strong sales gain in lower price homes occurs in areas with extreme price declines resulting from foreclosures.

In the condo sector, the strongest condo price increases in this quarter were in the Dallas – Fort Worth – Arlington in Texas, up 14.1 percent, followed by Toledo, Ohio, up 11.4 percent compared to fourth quarter in 2007.

Yun noted despite the market being clearly depressed by job losses and consumer concerns about the economy, the much anticipated housing provisions in the economic stimulus package may spur some buying interest for the critical spring home buying season.

A survey by Pew Research Center’s Social and Demographic Trends project in October 2008 shows Denver, San Diego and Seattle as the top three cities most respondents would like to live. Orlando Florida, Tampa Florida ties for fourth place with San Francisco California. Detroit, Cleveland and Cincinnati at the bottom of the ranking.

Major findings include:

• Ideal community type:

            30% small town

            25% suburb

            23% city

            21% rural area

• Young adults would rather live in New York and Los Angeles        
• More men than women want to live in Las Vegas, Nevada
• Republicans prefer Phoenix, Arizona
• Democrats would rather live in San Francisco, California
• Seven of the top ten favorite cities are in the West and the other three are in the South     
• More than 60% of Americans prefer to live in a hot-weather over a cold-weather climate
• Almost half of those surveyed would rather live in a different community than there current home.
• 60 % rate their current communities as excellent or very good.