Increase in Home Sales Bodes Well for Home Improvement

Michael Stein — Tue, 13 Oct 2009 20:58:00 GMT

The Naples Daily News reports that Fort Myers 2009 home resales for the nine months ending September are up 120% over the same period during 2008. While this is a positive trend in healing a battered real estate market there is some bad news associated with the increase in volume. According to the article, of the 1185 homes sold in September 2009, a whopping 70% of the transactions were either short sales or bank owned. Moreover, the sale of these distressed assets is depressing the median home price. In September 2008 the median home price for a Fort Myers single family home was $126,250. Fast forward to September 2009 and the median price is at $85,500. The low prices are having a big impact on inventory. Again, comparing year-to-date through September, single family inventory from 2008 to 2009 has declined by 5805. There are almost 50% fewer single family homes available now in Fort Myers than one year ago. Combine this significant decrease in inventory with the very low prices and it sure seems like the 2009 buyers are in the money. The wild card is the unknown inventory held by the banks.

What is clear is that the 2009 buyers have purchased homes well below replacement costs. These owners have provided themselves significant financial cushion to make additional investments in their properties. The buying class of 2009 will have significant competitive advantage over all the other buyers of the last five years when they decide it’s time to sell the 2009 acquired property. In addition, if so inclined they have room in their purchase price for home improvements for their own enjoyment or to make it more attractive for a new buyer when that time comes

Gentleman Builder Blog

Increase in Home Sales Bodes Well for Home Improvement