Orlando, FL (PRWEB) May 10, 2006
For the first time this year, there are clear signs of a return to normalcy in the market Central Florida vacation home. Hightower Realty (http://www.hightower-realty.com) has been looking since the beginning of the year for an improvement in the market weakness that followed the frantic sellers market the previous two years. Until recently, there was little reason for optimism, but now everything is changing. Agents throughout the region are reporting more requests to show homes for sale. Offers start coming for some of the homes priced more realistically. And too expensive houses are disappearing from the market or being reduced in price to more reasonable levels.
Despite earlier predictions, it becomes clear that the selling prices of accommodations were remarkably well throughout the recent strong buyers market, refuting the alarmist predictions of the supporters of the “bubble”. The latest statistics show that recent market problems have had nothing to do with values, and everything to do with the lack of buyers.
during last year talked about the housing bubble bursts on the market of Central Florida, particularly in the market for vacation homes. In our opinion there never was a bubble to burst.
It is true that the average market prices increased by over 25% per year over two years, so it was tempting to think of it as true values exceeding sustainable, to be followed by a major downward correction. We believe that the period of rising prices was in fact correct, unrealistically low values four years ago to values that no longer conform to the national image.
There was a lot of confusion about how home values have changed over the past year. We ourselves have cited a drop in market prices by 10% since last summer? S peak, but it is important to realize that the statistics that we used to calculate this reduction relates to ask the price, not the actual prices obtained. For the first three months of 2006, there were so few actual sales closed that it was not possible to derive meaningful statistics on the actual selling price changes.
Now that we have more data to work with, it is clear that the decline in listing price was largely irrelevant because it simply reflects a decrease in the number of sellers who cling to the belief of the last year that you can have what you want and probably get it. When we look at the actual selling price, it is a remarkable fact that in the case of the market of Central Florida home rentals, there was no reduction in home values over the past year.
Although it is against-intuitive, the latest figures published in the Market Report for May Hightower Realty (http://www.hightower-realty.com/market-report-may-2006.htm) clearly show that this is the case. Statistics show the average selling price (not listing price) of a house in the pool with 4 beds typical of a representative sample of five of the largest communities of vacation homes scattered throughout the region:
2005, January-June: $ 322,000
2005, July-December: $ 344,000
2006, January-April: $ 345,000
Hightower Realty anticipates a slow return to a balanced market for the rest of this year, which will probably continue into 2007 before there was any substantial increase in the value of houses, or houses primary or vacation homes in Central Florida. On the other hand, we do not expect to fall in values over this period is, and it is likely that the available stock will begin to stabilize over the next three or four months and then start falling back to more normal levels.
Buyers will return to the market in increasing numbers, but this time they are real buyers, not short-term speculators. Few buyers will write a contract on a new home or property re-sale now hoping to make a quick profit. This will keep market activity well below what we saw a year or two earlier, but in the long run this can only be good for the market and for buyers and sellers.
effect of the slow return to a more balanced market that will be substantial discounts currently offered by the developers of some of the new communities of homes such as Citrus Gardens (http://www.hightower-realty.com/citrus – gardens.htm) Cane Island Resort and (http://www.hightower-realty.com/cane-island.htm) are likely to disappear in the coming months, with a price back to the levels set when the projects were first announced last summer.
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