Bradenton-Sarasota Housing Market Recovery is Coming …

… but when?

It may be six months to a year away, but experts say local real estate activity is expected to make a full recovery.

“People should not bet against this region, the Bradenton-Sarasota-Punta Gorda area,” said Lawrence Yun, a senior economist for the National Association of Realtors.

Yun was the speaker Thursday at the District 13 Technology and Business Expo, which attracted nearly 400 Realtors from six associations.

“It’s usually coastal markets that tend to have the elevated prices,” Yun said. Those elevated prices are caused by the demand for good climate and coastlines.

Around 2000, the Bradenton-Sarasota housing market saw a surge of demand that continued into 2005, but initially supply didn’t keep pace with demand, causing home prices to rise dramatically.

“Eventually supply caught up with demand and now some may say there is too much inventory,” Yun said.

Reaching a balance between supply and demand is just one of several things that will help the Florida mortgage market get back on track.

New home construction fell 33 percent across the nation, while Florida saw a 70 percent decrease in new home starts, and that may just be a step in the right direction, Yun said.

“This is a natural response among the home builders. The market has excessive inventory,” Yun said.

According to Jim Lee, Manatee County’s building director, new home starts are down 60 percent. “For many years, we were straight up but the last two years, it’s come down,” Lee said.

The same is also true for the cost of real estate in the area.

In 1990, the median price in Bradenton-Sarasota was $80,000, lower than the national median, but by 2006, the median home price had quadrupled to $320,000 and was more expensive than the national median.

It is for that reason Yun has a hard time calling the current decrease of median home prices in the area a correction.

“There is really no correction or recession in terms of home value,” Yun said. “Florida will have the highest price growth in the long term.”

The National Association of Realtors began tracking home sales and home prices in 1968. Since then, the price of homes across the nation have increased tenfold.

“If the past is a good reflection of what may happen in the future, then over the next 38 years we’ll see the home prices increase tenfold again, and areas like Sarasota may see 20-fold increases,” Yun said.

A large part of the economy is driven by [the Florida housing market], Yun said.

“Housing’s contribution to economic growth is falling and any policy that hurts housing can hurt the economy,” Yun said.

“Real estate contributed far more during the boom than the 10 percent to cover inflation so now that the boom is over, it makes sense to take the burden off real estate,” Yun said.

“Property tax reform, I think that’s a very positive step.”

A survey done by the National Association of Realtors found property taxes weren’t the only problem keeping potential buyers from closing deals.

“About 80 percent of Realtors have had buyers postpone or cancel a contract because they couldn’t get insurance or the cost of insurance was too high,” Yun said.

What is most detrimental to real estate sales, according to Yun, is not bad credit Florida mortgage lending, but something far more basic:

Consumer confidence.

“Everything points to continued growth. The question is, when will the consumer confidence come back?” Yun asked.

The purpose of Thursday’s event in Sarasota was to discuss the future of the real estate industry and examine new marketing efforts and techniques that may spur personal sales of real estate agents.

“This is our big event for the year,” said District 13 Vice President Lynn Parker.

In addition to Yun’s lecture, Realtors also had a chance to network and learn about new products like EZList.

EZList, the brainchild of Port Charlotte’s Jim Crumbaugh, allows listings in the Multiple Listings Service to be translated to Spanish.

According to the National Association of Realtors, by 2010, 40 percent of all Florida home mortgage applicants will be Hispanic.

“There are places that are in dire need of programs like this,” Crumbaugh said.

SOURCE: Bradenton Herald