As I'm sure you've seen in the news lately, nationally, we're continuing our housing slump. I recently read an article which stated that (nationally) more new homes were sold in July 2007 than any other month since I believe they said a particular month in 2003. The article went on to say, although there were record sales, the decrease in sales price of those homes sold in July also represented a record drop in sale price. Though that sounds a little scary for those of you trying to sell or thinking about selling it really just supports the premise that Pam and I have been writing and talking about over the past few months. The notion is, if it's priced right, for the current market, it will sell. Let me add to that, if the home is in the best possible condition,
clean, priced right, and always available for showing, there's a very good chance your home will still sell, even in this market.

Except for those homes purchased in the last two years, you should still walk away with money in your pocket.

Side Note: still, we have some folks who purchased a home several years ago saying they're going to wait until prices start going up. To them I give this example. Let's say you want to sell your home and it's current market value is $300,000. After you sell, you want to purchase a $400,000 home (maybe bigger, maybe newer, maybe in a better neighborhood). Right now
if you sold, the different between your $300,000 home and the $400,000 is obviously $100,000. Now, again, using round numbers suppose we have 10% appreciation in the next year (I promise you we won't, but let's say anyway). If our area increases by 10% in the next year, your homes market value will be roughly $330,000. That new home's market value will be roughly $440,000, you've lost $10,000 in equity.


In short, I think its imperative that I reiterate (possibly from previous discussions with you or from points I've made in prior newsletters) that the Real Estate Market is "GEOGRAPHIC SPECIFIC". Essentially, our market in the Pensacola-area is much different than the market in California, Maryland, Miami, or even Fort Walton Beach and Destin. Further, in a recent
discussion with a friend of ours, we were asked the question: "How's the market these days". As an aside, as a Realtor, the frequency of that question rivals the perpetual inquiry of "what did you do to your leg" to someone who's wearing a cast (ha-ha).

Anyway, I started out by reiterating the seemingly "canned" response that I've given a number of times recently, then stopped and realized that as much as we tout real estate is geographic specific, so too is the type of real estate. For instance, the Pensacola-area condo market is distinctly different than single family homes, the market for million dollar homes is different
than sub-$200K, and still different is the local commercial market.

Before I start talking about the housing slump, let's look at the numbers. You'll see that prices (overall)haven't dipped on the average, but the current inventory (number of homes sold over the last period dividedby how many homes are currently on the market) has increased significantly.

CLICK HERE for Stats

Note:
The "Current Inventory" column reflects the number of active listings on the market on the 16th day of each Month.The "Months of Inventory" column is equal to the "Current Inventory" divided by the "Monthly Sales". This reflects how many months it would take to sell out of inventory at the current month’s rate of sale.

That said, nationwide and locally, we are in a slump. Depending or where or what type of real estate you're talking about will dictate how much of a slump. The next question that invariably follows is, why are we in a slump. If you asked me that a year ago, I would have said the fear of hurricanes. Six months ago, I would have said taxes and insurance. Now, I'd suggest
the mortgage debacle, lack of investors, rents too low, and insurance issues. We have over 700 people in our database who have either sold homes to, helped purchase homes, or are thinking about buying or selling. The majority of our clients and leads come from those families looking to move to the Pensacola area. A year ago, the topic of hurricanes came up in 80% of our conversations.

Today, I'd say less than 1%. As I mentioned in last months newsletter, it looks like property tax relief is on the horizon, so that's not so much of an issue anymore (well it is, but not as much). The investors, or probably more appropriately "speculators" are the one's who really drove up our prices from about 2002-2006. I remember receiving a call from a woman who represented a large Real Estate Investor group in Miami about a year ago. She said, I love your website, looks like you know what's happening and I'd like you to find us some property to invest in. I said great what are you looking for. Her response was "something that I can be assured 100% appreciation" in a year. About that time, I slumped back in my chair. I let her know that I've helped a lot of investors, but never once did I guarantee to anyone that they'd make a huge profit in a year and that if that was her goal, I couldn't help her. Some of them realized 100% appreciation in a year but "past performance doesn't guarantee the future". She then spoke to me like I was crazy since she said she was making bigger gains than that over the last couple of years. While I probably was crazy for turning her away, I never heard from her again, I suspect someone else out there guaranteed her success, and she doubled her money....Yeah I should have sold her that proposed beach front development in Cantonment.