by Sean Hess (Sean@StAugTeam.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com). Join us on Facebook.
The real estate market in St. Augustine is okay, really (with one exception). I’ll get to the exception a little further on.
Author’s note: a single obscenity dead ahead. If you have delicate ears proceed with caution.
The real estate market in St. Augustine is okay, but stop with the "Now is a great time to buy!" already.
I was listening to NPR on the radio yesterday and two f*cking idiots were talking about how bad the real estate market is. These folks, who’s career choice is radio, somehow feel they know the market better than I do.
No matter how much you want to sugarcoat it, no matter how many hairbrained thoeries you want to throw at it, the sale of real estate simply comes down to supply and demand.
Right now the supply of single family homes in St. Augustine is on par with demand. We know this because prices are stable and even appreciating.
For example, the price of a single family home in St. Augustine has an average cost of $225,119 through the first five months of 2011, which is on par with the average cost of a home 2010. There have been an average of 125 home sales a month in 2011, which is also on par with 2010.
Another thing to remember is that 2010 sales figures included the $8000 tax stimulus. There is no tax stimulus this year (except for military deployed overseas), and yet sales figures are just as robust.
Sales prices are up 3% over 2009 (so the market has appreciated, albeit modestly), but what is even more critical is that unit sales are up 10%. So if you have the same amount of people putting their homes on the market, and you have 10% more buyers than you have had in the past, then the supply of available homes goes down, which leads to stability and appreciation. That’s what is happening here in St. Augustine.
“Now Is a Great Time to Buy!”
Realtor and Realtor organizations have been slammed, justly in my opinion, for always trumpeting “Now Is a Great Time to Buy!” It erodes public confidence in the real estate professional when the phrase is thrown about willy nilly.
The truth is, unless you’re a real estate investor, buying or selling a home has nothing to do with “Now Is a Great Time to Buy!” It has to do with your needs at the time. If you have to sell grandma’s house, for example, you have to sell grandma’s house regardless of market. If you get transfered from Seattle to St. Augustine (after living in Seattle only two years), you’re going to get hosed regardless of market because your going to eat closing costs on both ends.
My point is: even though the real estate market is stable and appreciating in St. Augustine, whether it’s a great time to buy or sell (or not) depends on your individual circumstance. Don’t take this as another “You Better Buy Now Before Prices Go Up!” post from an idiot Realtor.
The exception in this market is the vacation class / 2nd home class of beach condos, typically the ones that are in beachside communities. These condos never saw the massive foreclosures that the rest of the market saw…most of the owners are stable.
But that stability in ownership is part of the problem. These people don’t need to sell. And since there is no need to sell there is no motivation to get price in line with market. And since lenders have brought some sanity back to 2nd home lending (20% down, for example), no one is willing to put a lot of money down on a property where there is still a high supply and low demand (which mean prices have to come down). So the market stagnates in a kind of Mexican standoff.
Land is somewhat of an exception. But because the residential market is stable there is a dearth of choice in single family homes. And since buyers aren’t finding a lot of choice in the marketplace (compared to what was available for the price two years ago), they are thinking of building. The upshot is that after not being able to even remember the last piece of vacant land I sold, we’ve already sold two vacant lots this year and have another two under contract. So that people are starting to build again is another good sign for this market.
If you want a team that gives you the best market advice, contact St. Augustine Team Realty!