Lenn Harley posted yesterday about market data and the media. She pointed out that it is not all about the price but also about the volume of sales. In her area the price is up 57% since 2002 but volume is down 59%. She explains it better than me so here's the link....go read and her post. I'll wait...........la la la la la la. Ok are you back?
Anyway, Lenn's post inspired me to do a little research on my market, Poinciana, Fl., to see how things have changed since 2002.
Here's a little chart I put together:
Price and volume comparisons 2002-2007
Poinciana FL.
YEAR | SALES | % CHANGE | AVE. PRICE | % CHANGE |
2002 | 494 |
| $ 94,000 |
|
2003 | 716 | + 31% | $107,000 | + 12% |
2004 | 923 | + 22% | $131,000 | + 18% |
2005 | 1256 | + 27% | $189,000 | + 31% |
2006 | 1075 | ( -14%) | $217,000 | + 13% |
2007 | 409 | (-62%) | $194,000 | (- 11%) |
OK, here are my comments. First statistics can always be deceiving and don't necessarily show the entire picture. For example, these stats are from the MLS. But what about new construction?
According to City Data, Poinciana had a population of 13,647 in 2000. Right now our population is roughly 68,500!! That's an increase of 491%. That means there were a ton of new homes built in Poinciana during this 7 year period. Most of these were built during the boom period of 2002 to 2006. If I were to estimate 5 people per household that would be close to 10,000 homes. That sounds about right to me.
According to my chart values are only down 11% this year from 2006. That may be true for homes sold through the MLS but it is not true based on my experience. There are currently 1149 SFH on the market in Poinciana neighborhoods. 404 of these were built in 2005 or later. There are also 554 homes currently under construction. What this means is new construction is a major part of Poinciana's market. Based on the analysis, that I do daily for potential Sellers, values are down 25% to 30%. If they bought a new house in 2006 for $250,000 it may be worth $180,000 at this time. That's a decrease of 28%.
But the true indicator of market conditions is the sales volume. The amount of homes sold through the MLS is down 62% from last year. I'm not sure the exact number but new construction is down at least that if not more. Our absorption rate is currently 36 months!!
According to my research, look at the chart again, if you bought your house in 2004 or earlier then you should be in a pretty good position. Values have actually more than doubled since 2002 and have increased 32% since 2004!!!
So folks, the reality is even though the RECENT decline in prices and volume are pretty drastic, overall, if you bought your house at least 3 years ago you have experienced good appreciation and should be in an excellent position to sell or refinance if you need to. This of course, assumes you haven't already refinanced and spent all of your equity. Did you?
IN SUMMARY
If you have no equity in your house, you either have not lived there at least 3 years or you have already spent it. This is the reality of market conditions in Poinciana Fl. Is your reality in line with reality?
Copyright © 2007 Broker Bryant Real Estate Ramblings | All Rights Reserved
Reserved Parking For "The Lovely Wife"...TLW...ROAR!
Blog Boy...
Don't get me started on Reality today :)
This is one of those days where my Reality needs to hush up :)
TLW...ROAR!
Man. How much should I read into the comment from TLW?
(if she edits it, all it says is "x")
It's a tough market. Different places, different prices, different practices.
It's about time that we take back the truth and lay it out. There has been enough whining about the media, when in fact they aren't that far off.
Lane...
I reserve my parking spot with a kiss :)
TLW...ROAR!
Dan, You are right. And those are exactly the foks that the rate freeze is supposed to help. My question is why? Why should they have expected appreciation in such a short period of time? And they never should have taken out an ARM expecting to be able to rtefiance within a 24 month period. It's utter foolishness.
Marc, Yep it does. I hear it every day. Well cry me a river. I bought 4 properties in 2005 and I too have lost a lot of equity BUT I was smart enough to get fixed rate mortgages.
Candace, Poinciana is one big PUD(planned unit developement). Our association has a monthly paper and on the back they published how many homes are under construction and haow many folks have moved into the area. It's very handy info.
Jennifer, I've been sellling property in Poinciana for almost 14 years. I'm used to working a difficult market.
Randy, Volume is certainly way down. Look how our values have more than doubled in 5 years. That's awesome!!
Lane, I too find it hard to put a positive spin on things when the reality is the market sucks!!!
TLW, xyz :)
Candace,
Check it out. This is our "box score" with new construction data.
BB - WOW, is all I can say to that kind of growth in that short of a time period! That's amazing to see those kinds of numbers.... your chart is a great way to show in writing what reality is to potential sellers. And then to factor in the new construction sales and the impact of those on the market over that same time period.
I'm still thinking --> WOW to that growth!
Ann
BB, OK, you got me here. I commented on Lenn's post after you did. I had a few questions for her. The idea being that there are a lot of factors in todays market not the least of which is "general perception" and other economic conditions.
Assessing what the average price should be now in relation to 2002 is going to be difficult. All the new construction in your area is going to raise prices because the houses are probably bigger and better than what was generally available in 2002. But if you calculate your 2002 value per square foot then add 5% per year for inflation (not growth, that's another factor) you should be able to come up with a value per square foot today. Apply that to a typical house that is available for sale might give you a useful comparison.
Anyway, the absorption number means nothing to me. If home sales pick up next month then the number will be very different. Actual sales numbers are interesting, but only interesting not meaningful.
Your population growth is really something. Are they all going to stay there? What I'm asking is, "is it real?"
But back to the other post, I can't believe you want more foreclosures. Who does that help? Speculators, bottom feeders?
Bill Roberts
Bill, I certainly do not want more foreclosures. BUT it is what it is. It's my opinion that the faster we crash we faster we can start rebounding. My market is being devastated by foreclosures and next year is going to be quite a bit worse. Most of them are flips that flopped. Poinciana was raped by Investors during 2005 and 2006. They came down from NY and up from South Florida and caused our prices to sky rocket. Poinciana is just a working class community. Still to date the highest resale in Poinciana EVER(not counting Solivita) was $375,000.
Poinciana is a family neighborhood. 50% of our population is under 18. They will stay. It was, and will be again, affordable housing right in the middle of the State. One hour to Orlando and one hour to Tampa.
Commercial properties are booming in Poinciana right now. That's a good sign.
Ann, we have certainly experienced tremendous growth over the last 5 years or so. We still have room for about another 100,000 people. Poinciana is the second fastest growing PUD in the country. There were only 7,000 people when we first started selling here about 14 years ago.
Bryant. There are very few new homes that are not listed in our MLS. Ryan Homes in MD for one is not in the MLS because they don't co-op.
The point I was making is that, just because prices are holding up in our area, sales are way down. The trend is also down, down, down.
As I see it, there are two big differences in your market and mine.
1. You have more investment and second home buyers which are much more subject to foreclosure than our owner occupied homes. We do have a number of investor owned homes on the market or in foreclosure but they're all real estate agents to tried to buy new and flip. Can't have a lot of sympathy for them.
2. Our prices simply out paced our buyers income dramatically. If the average price had held steady at the affordability range, for most buyers around $450,000 or even $500,000, we'd still be selling. But, no, they had to keep driving the prices up, agents did that to get the listings and then the lenders would finance anyone who could fog a mirror. Once the average price got over $700,000, it was over.
Nice post. I love the stats, being the stats junkie that I am.
Lenn, I wrote this just for you:) I know how much you love stats. We actually had very few builders with inventory in the MLS. That has changed some now. Even Maronda homes just started offering commissions to agents. That's a first for them in about 30 years of being in business!
Diane, I agree. It's good for folks to be able to see LOCAL data.
Rebecca, I don't know. I do know that a large portion of the new construction over the last 3 years was investor bought. If I had to take a guess I would say as much as 50%. Village 7 in Polk county Poinciana looks like a ghost town with all the empty "flips that flopped". That was our busiest neighborhood in 2005 and 2006.
BB, these are critical points to consider, from the comfort of a holiday time chair. Let me ponder.
Yep, this is the telltale stuff. Lenn's good at presenting it. So are you. Seems that all markets have this in common, if they have had their home for five years, they make good money. But they don't make any that never existed. Good post... but we expect that from you. Bertha though, that's a toss up ball.
Cheers
Pretty wild figures there... would the moral of the story be to concentrate your marketing efforts on people who have been in their homes over 3 years then?
Bob Mitchell
ValueList Real Estate Services, Inc.
Missy, the turning point in our market was the hurricanes. We had 3 direct hits in Aug and Sep of 2004. Most of thise sells in 2004 were hurricane damaged properties. We were swamped with investors from Nov 2005 to about summer of 2006. That was pretty much how long our boom was.
Laurie, How is that chair working out for you? I just started my holiday chair activities today.
Renee, It sounds like you have been very busy. Good job!!
Richard good to see ya. I dread getting calls from sellers that just purchased 12 months ago. I know there is nothing I can do for them.
Lisa, I don't. I'm sure I could get it from the public records but that's waaaay too much like work:)
Marlene, It's so important for folks to list with someone in their area. I don't care how many properties a REALTOR(R) has sold, if they haven't sold in Poinciana they are clueless.
Bob, It is exactly what I do. The problem though is there are so many newer short sales and bank owned properties on the market that anything built before 2000 is very difficult to sell no matter how we price it. My market is a mess.
WOW, how times have changed. That is pretty depressing. Hopefully 2008 will be better. We have written 3 contracts this past week and one has fallen through already due to home inspection and the other two we are waiting for the banks (sellers) to respond. At least the fall through will start looking again after the holidays.