This article and some in the future (assuming I’m allowed to contribute more) will address real estate related issues, occasionally accompanied by some intended (and unintended) humor.
Real estate on Marco Island seems to be contagious: wherever one goes, it seems as though the topic of conversation eventually lands on the subject. I wonder why.
Until a few years ago, real estate dominated conversations at most gatherings of more than one person, and the talk was mostly by property owners wanting to brag about their triumphs and the great successes of their investments (usually it’s a ‘guy’ thing’). For the last few years, bragging rights were assigned only to those who sold before the collapse.
As a longtime player in the real estate industry, I am constantly being asked, “How’s the real estate market?” My answer: I’ll get to it later. However, I think one of the best answers I have come across is: “It’s unbelievable.”
The individual who originally shared this response explained that when the market is great, “It’s unbelievable” is an accurate and positive response, and when it’s a down market, it represents a sad truth with a positive tone.
Now, for my answer to the question, “How’s the real estate market?”
Inventory is down; prices have stabilized, finally; sales are up, finally; interest rates remain at historic low levels.
Statistics reveal (compliment of the Marco Island MLS) that inventory is down from a year ago. House inventory (since December 2008) is down 17 percent and condos 10 percent. Some other interesting statistics reveal: houses under $500,000 represent 45 percent of sales; under $750,000 represent 75 percent. Further, price categories up to $750,000 show an increased number of closed sales from 2008 by 30 percent; the numbers of closed sales above $750,000 were down 28 percent.
“So, what does this mean?” you ask.
First, let’s address the inventory. In grade school we were taught basic economics: supply and demand. When supply is high, prices tend to be low; when supply is decreased, prices will increase (assuming there is a demand). When demand is high, prices increase; when demand is low, prices decrease. Unless you are a hermit and haven’t tried to buy a house, car, gasoline, appliances, toys etc., in the last few years, you have witnessed basic economics in action.
With a significant decrease in inventory (nearly 50 percent in two years) and buyers coming back into the market, prices have stabilized. Further, if you are in the market to buy and your budget is under $750,000, your competition is growing and if you have a house you want to sell in the value range, your chances of selling have increased significantly from a year ago.
“Where do you see the market in 2010?” I’m asked.
To get the answer, I go to my crystal ball. However, when I find it under all the Christmas gifts scheduled for return or exchange, I discover that in the madness of the holidays it got cracked and won’t respond to my inquiry. Now I have to call upon my wits and try to develop an intelligent opinion.
Here goes: first, ask yourself why you are here, either as a full or part time resident or as a visitor. We, on Marco Island, have what everybody wants and/or embraces for his or her future. There are not many places in these United States or in the world, that offer what we value every day. Marco Island is not only a city or a location, it is a lifestyle.
Bottom line: in the past, people were willing to pay a high price for the Marco Island lifestyle, and they will again.
Marv Needles is the broker/owner of ERA Flagship Real Estate which he founded in 1973. He has been a full time resident of Marco Island for over 40 years.