2009 - A Year In Perspective

To say that 2009 was a challenging year is quite the understatement, don't you think? Many of us are looking forward to a new year with hope and anticipation for continued economic recovery with an unprecedented vote of confidence.

As we reflect over the past year, the obvious thing that will be remembered about 2009 is the Economic Meltdown. It seemed the government tried a variety of steps to stop the bleeding, but it kept coming. Going forward will be critical to avoid the magnitude that this crisis has effected on so many people's lives. So, for 2009, let's talk about the impact on real estate... and what to expect for 2010.

Overall, 2009 saw improvements in the residential area of real estate... particularly in the second half of the year. Not so good for commercial real estate which seems fated to withstand another tough year in 2010.

Here in Florida, we are definitely seeing the market strengthen. Watching the monthly statistics, we have noted a continuing decrease in inventory along with continuing increase in the number of home and condo sales. Actually, as of November, it marked the 15th month of increases over the prior year. As we saw this trend unfold, we began including the monthly Market Statistics right on our website in August of this year and you can access each month directly from our Home Page.

So now... the question on most people's mind. What's in store for 2010??? A rash of foreclosures impacted prices in 2009. Beginning in 2010, many adjustable-rate mortgages (remember those 5-year interest only loans that were easily attainable in 2005 and 2006?) will begin to amortise. The question is whether homeowners facing this increase in their monthly payments will keep up. Fortunately, unemployment seems to be stabilizing but will it continue to moderate from the staggering 10% level it got to in 2009? Mortgage rates hit a record low in November 2009, but government plans to pull back on mortgage-lowering programs may change that trend.

On a local level here in the Tampa Bay area, we are seeing a mix of properties in the prime locations. In waterfront condos, for example, in a highly desired building there is not one of the 55 units for sale any more (there were 11 on the market in 2008). In another, there is no unit price under $1M although earlier this year there were two in the high $800's. And yet, there are still foreclosure opportunities in a new gated community to get a beautiful unit for HALF of what it sold for in 2007! But only a couple and those will be gone as well. We are getting a rash of calls for long term rentals which has many would-be sellers taking their home off the market (with a renter in place) to wait out this slump and command a higher price as the upturn begins.

More tomorrow...