Real Estate Matters

With plenty of talk now going on about property taxes, homestead exemptions, property insurance and price adjustments, we as property owners, need to be proactive and vigilant with our state and local legislators during this period of price stabilization and increased sales activity. Not only are permanent homeowners being affected, but second homeowners, investors, part-time residents and international homeowners as well.  Overall our market is strong.  According to the Florida Association of Realtors (FAR), the statewide median home price has shown an impressive increase of 64.2 percent from August 2002 to August 2007 and prices seem to have stabilized. With the forecast from National Association of Realtors (NAR) projecting that prices will rise about 2 percent next year, and in coming years, average home price appreciation should return to historical averages of around 6 percent. The Sarasota area usually out performs national averages.

So how did we get into this period of price run up and increased inventory from 2003 to 2005?  One explanation comes from Dr Lawrence Yun, senior economist of the NAR who recently spoke at SAR's International Congress.  He noted that the price run up was not due to investors, but to speculators.  Investors typically run the numbers to see if an investment makes sense from a return standpoint, and invest to hold it for the return.  Speculators generally did not run the numbers, and never intended to hold the property as an investment and intended to "flip" it quickly for a profit. This resulted in local home prices rising faster than income and the results are now being felt in the price adjustment.  Overall, real estate has traditionally been, not only the largest single investment for a family, but ownership means having a place to call home.  According to Nancy Riley, FAR President, "although research shows it is the largest single investment most families make and helps to provide security for the future, owning a home isn't just financial investment.  Ownership is about having a place to call home:  a place where families build a future and become part of the community."

The real estate market is, as forecasted, showing positive signs of stability and reasonable growth, but we need to be vigilant locally with property tax reform, homestead exemption and property insurance relief to insure that ownership in real estate continues to be our safest investment.