Numbers can mean different things to different people, but recent figures on the local housing market appear to provide some long-sought hope.
Last year at this time, the big question in real estate on the Emerald Coast was still, “Where’s the bottom?”
All too familiar, after the past several years produced a terrifying mix of foreclosure filings and plummeting values.
But six months into 2009, some numbers from Metro Market Trends are worth noting. Single-family home sales are up in Okaloosa, Santa Rosa and Walton counties. Accordingly, so are the average sale prices.
Gloria Frazier, owner and broker of ERA American Realty of Northwest Florida, offered several theories on what those figures indicate.
“Interest rates are still at historic lows, and the first-time homebuyers’ tax credit ($8,000) is being felt now,” Frazier said. “And prices did reach a point where affordability was there.
“I’m still not convinced the market is unconditionally on the rise,” she added. “I think it’s more accurate to characterize it as ‘bumping around the bottom’ through the rest of this year. The price increases are a very good sign, and I think we’ll truly be at the end of the spiral in the spring of 2010.”
Frazier offered some numbers of her own from the Multiple Listing Service (MLS) that is generated from the Emerald Coast Association of Realtors.
Comparing the first quarter of this year to the first quarter of last year, on single-family homes, condos and town homes combined:
- In Okaloosa: 982 pending contracts reflected an increase of 58 percent and 253 sales was an increase of 71 percent. The average home was on the market three fewer days (163), and the average price bumped up $4,523.
- In South Santa Rosa: 329 pending contracts reflected an increase of 57 percent and 707 sales was an increase of 77 percent. The average home was on the market seven more days (156), and the average price bumped up $13,787.
- In Walton: 572 pending contracts reflected an increase of 35 percent and 421 sales was an increase of 51 percent. The average home was on the market 23 more days (234), and the average price jumped by $66,446.
“There’s been a big increase in people looking,” said Jennifer Howard with Prudential Coastal Properties. “Prices have gotten to the point where it’s hugely compelling to persuade buyers to get off the fence. And with the $8,000 tax credit and other aggressive financing, first-time buyers have boosted the market considerably.”
Prudential Coastal Properties opened a new office in Grand Boulevard last year. Broker Chip Jervis reported that as recently as two weeks ago, he had 18 contracts pending.
Thomas Williams, chief operating officer for Pelican Real Estate, had a similar outlook. According to its Web site, Pelican has grown into the largest locally owned real estate company in Northwest Florida.
“Literally, it’s been five years since I’ve been this encouraged,” Williams said. “Last week, we had 27 pending contracts in one week. That included single-family homes, condos and a few lots mixed in. And they were pretty much across all price points, from $150,000 to more than $3 million.
“This market has gotten to the point where there is real value again, and people aren’t sitting on the sidelines anymore,” he added. “The stabilization point is when any listing hits that price point, it’s gone. That’s the market bottom and you’ve got to put the floor in first.”
Williams also was quick to factor “a mental process” into any recovery.
“Tops in markets are events and bottoms are a process,” he said. “All recessions to some degree start with a mental process, and that process feeds on itself. And recovery has to start with a shift in attitude, where you just don’t have people sitting around saying, ‘Where’s the bottom?’ The amount of pending contracts right now is 40 to 50 percent of the whole year last year. March, April, May, June — the market has exploded.”
Part of that comes from the sales of foreclosed property, as well as “short sales,” in which the lender accepts less than the total value of a home. Not too long ago, this was more theory than practice, but several major Realtors in this area are reporting the process has become easier and thus more successful. All of this puts a dent on the “available inventory” problem.
Steve Schutt at the Niceville branch of mortgage lenders Baker & Lindsey said the 15 loans his office had closed in June were nearly twice as many as June of 2008. He said the average purchase price was $285,000, with a low of around $120,000 and a high of around $420,000.
However, those sales prices don’t match prices from last year. As a result, the dollar amount of June sales was only about 70 percent of sales from last June.
“A home in that market right now that lists for $450,000 was $800,000 several years ago,” he said. “Our buyers here are often retired military who are making $60,000 to $90,000 a year as government contractors.”
Among recent first-time homebuyers are Master Sgt. Lassiter Dent and his wife, Stacey Dent. They have been stationed at Eglin Air Force Base slightly longer than three years. They’ve been married for 15 years and have two daughters, Kora Schae, 14, and Cheyanne, 12.
The Dents bought a three-bedroom, two-bath home with about 1,900 square feet in Niceville’s Palm Estates for about $200,000. Their credit was strong enough that they did not have to make a down payment and they still snagged a 30-year fixed loan for 4.7 percent. The Air Force also gives them a housing stipend based on rank and length of service.
“We had rented a house in Crestview our first year here, but we just felt that drive was too far,” Stacey Dent said. “We looked at nine homes in Niceville and Valparaiso, all about the same size.”
Dent credited Mary Shaw of ERA American Realty of Northwest Florida and Linda Kirkpatrick from Mortgage One of the South for making the process less scary.
“It really surprised me,” she said. “I was deathly terrified before, but it wasn’t nearly three quarters as bad as I thought it was going to be. … Right after we moved in I was sitting there watching TV, and I said, ‘This is just so weird to be sitting here, realizing this is our home.’ But things get better every day.”
Shaw recalled the dark days of 2007, but said her contracts pending or closed in the first 6½ months of this year equal all of what she did in 2008.
“It makes me feel good because I’m on track to where I was in 2004,” she said.