ECAR 'cautiously optimistic' about market (May 2008)

Sales across the Sunshine State shone brightly in March, with sales of single-family homes up by more than 12 percent and condos rising by nearly 16 percent as compared to February, according to the Florida Association of Realtors.

Experts are cautiously optimistic that the forecast ahead is looking bright as well.

In a recent National Association of Realtors housing outlook, NAR Chief Economist Lawrence Yun said, “Existing home sales could start to show a sustained increase within a few months, unless there are some additional economic problems or excessive inflationary pressure.”

“We’re looking for essentially stable sales in the near term, before higher mortgage loan limits translate into more sales in high-cost markets,” he said in the outlook.

Locally, the market appears to be following suit.

“I’d say we’re cautiously optimistic about the future,” Cliff Chaplin, president of the Emerald Coast Association of Realtors, said in a news release. “But there does appear to be more activity within the market — more activity in the way of more showings and more contracts.”

According to FAR stats, although the local single-family market declined by 14 percent in March as compared to the same month last year, it was well under the state average of 24 percent and far less than the major metro areas of Miami at 56 percent and Jacksonville at 37 percent.

Closer to home, sales of single-family homes in Pensacola dipped 37 percent and in Panama City Beach by 26 percent. Sales of condo units along the Emerald Coast declined by 58 percent in March as compared to last year, according to the FAR stats. In comparison, sales were off by 47 percent in the Miami market and 60 percent in Orlando.

Sales also declined in the areas to the east and west of the Emerald Coast, dropping 36 percent in Panama City Beach and 6 percent in Pensacola.

News of the decline in the local area surprised area brokers and other real estate professionals on one hand, and seemed justifiable on the other.

Kerry Veach, broker for RE/MAX Southern Realty, explained in the release that oftentimes there can be as much as a three-year span between a signed contract and closing on a condominium unit, so the lull between closings often appears on data as a lack of sales when in actuality there are a number of signed contracts in the works.

“Condos are definitely selling right now,” he said, explaining that due to savvy pricing, condo units have become a red-hot commodity along the Emerald Coast. “(Because of condo sales) three of our agents are having the best year they’ve ever had.”

Local short-term condo rentals are also doing well, according to area insiders.

“I’ve heard from many of the (condo) associations that short-term rentals are up,” Darrel Jones, president and CEO of the Emerald Coast Convention and Visitors Bureau, said in the release.

RE/MAX Southern Realty’s sister agency, Southern Resorts, estimates there has already been a 15 percent increase in condo rentals this year as compared to last.

“In the past two years, we’ve had a 40 percent increase in short-term condo rentals,” Veach said.

The rise in short-term rentals goes hand-in-hand with a rise in visitors to the Emerald Coast, a popular drive-to destination, despite a corresponding hike in gas prices.

“Tourism is up 5.5 percent for the physical year, October ‘07 through February ‘08,” Jones said in the release.

And Jones figures the jump in gas prices actually works in the Emerald Coast’s favor due to the steady influx of visitors who typically travel by car from major metro areas around the Southeast.

“We’re closer than other parts of Florida,” he said. And being closer translates into less gasoline. And for the real estate community, it also translates into short-term rentals and possibly even sales.

Studies indicate that the local area tends to draw repeat visitors and that many of them will eventually invest in real estate here.

“Generally after visiting the area eight times most people tend to buy some type of vacation or second home,” Loretta Shaffer, director of marketing and Internet for the Beaches of South Walton, said in the release.

Most area real estate professionals say they don’t interpret the recent stats released by FAR as a sign of things to come. Instead they say that the continued interest in condos by buyers and their high occupancy rates in the short-term rental market indicates otherwise.

“We have more short-term rentals filled than before Ivan,” said Chaplin. “When the short-term market picks up, sales usually follow.”

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