©Sherri Dodsworth, PA – 2011

I love New Year’s Day. It’s one of my favorite holidays, in part because it’s such a nice neat closing of one chapter and opening of the next. I enjoy taking a look at where we’ve just been and reflecting on what lies ahead. Oh, and the champagne toasts at midnight are fun, too. Let’s explore how 2010 compared with 2009, and see if the numbers can provide us any clues as to what may be in store for us in 2011.

When we look at the sales data for the past three years, it’s obvious we are still in a correcting market. Except for the total number of lot sales, our 2010 market was down from 2009 in all other aspects: dollar volume, average sales price and median sales price. Home sales numbers are down across the board from 2009.

Let’s begin with lots. While 2010 average and median lot sale prices were both down roughly 60% from their 2008 levels, when compared to 2009 the average price was down 29% and the median price “just” 11.5%, indicating a flattening trend in downward pressure in land values. I believe the most telling figure here is in the dramatic increase in demand for lots in 2010: up 24% over 2009 and a very healthy 221% increase over 2008.

The housing figures vividly reflect the flip side of those falling land prices. Whereas land sales in 2010 were up 24% vs. 2009, area home sales for the same period fell over 9%. This shows how existing homes are somewhat of a lagging market indicator as the median price of a home has dropped 22% from 2008 while the median lot price is down nearly triple that at over 59%. The numbers illustrate pretty clearly why the demand for lots in 2010 increased 221% over ’08 while demand for houses rose only one-tenth of that at 22%.

I freely admit my rear-view mirror offers up a far clearer picture than the image in my crystal ball, but when I look at these numbers in my crystal ball I’m sensing that for 2011 the name of the game will likely be continued increasing demand for land resulting in a stabilization of prices, while existing home prices continue to correct downward at a faster rate. Buyers looking at existing homes are running the numbers while they’re shopping, constantly comparing the price of a home vs. buying a deeply discounted lot and building while constructon prices are once again low. More often then not these buyers are switching from house shopping to lot shopping. My sense is that we won’t see a stabilizaiton of housing rates until they reach that equilibrium where their prices are once again competitive with the pricing of the inventory of land.

And what has happened to our inventory over the course of the year? We began 2010 with a total inventory of 354, with 125 homes and 229 lots for sale in the Cape San Blas, Indian Pass and C-30 Corridor market. We end the year down just 4.24.% at 339, with 136 homes (up 8.8%) and with 203 lots (down 11.35%). Once again, illustrating the greater demand for land than houses.

I said at the beginning of the year I believed we had weathered the worst and that we would likely see an increase in sales this year which turned out to be the case at least with transaction volume, but our market continues to correct from the hyperinflated run-up which peaked locally in 2004. Land prices have returned to a price point that is once again attractive to buyers, and the buyers I see returning are primarily looking for long-term investments or second homes. We have moved a lot of bank-owned properties out of the inventory in the past 12 months and that is a good thing. We still have a good way to go, but all indications are we’re slowly heading towards recovery. I’m increasingly confident that light at the end of the tunnel is not an oncoming train.

I hope you’re recovering, too, from your New Year’s Eve revelries. Did you make any resolutions? Mine include developing new ways to bring you useful info in this blog. It’s been quite a year, and I appreciate my readers who have helped to make it so. My best wishes to you and your loved ones for good health, much love and prosperity in 2011. Happy New Year!

©Sherri Dodsworth 2011 – All rights reserved. No portion of this may be reproduced in any form without the express written consent of the author.