Real Estate Roundup
By, Mike Cooper
What’s up with this real estate market?
The short answer is: what’s up is the value of your home here in Citrus Springs. This article will discuss the facts of what is happening to the value of our homes, which is for most of us our most valuable single asset, and why it is happening. There has been an endless stream of hype about how hot the real estate market is, how homes are being sold within hours of coming on the market with multiple offers above the asking price. While this has happened in exceptional cases with unique properties such as those with open water frontage, in most cases even the exceptional properties must be priced at or, in some cases, below market value to generate that kind of interest from buyers. In most cases of quick sales with multiple bidders, the perception is that the property is offered at a bargain price. In fact, the average time it now takes from listing the property for sale to the signing of the sales contract is approximately 45 days and from listing to closing is 85 days. This is way down from 140 days on average in 2012, the start of the real estate turnaround, but for most homes, the sale does not happen overnight and on average for about 95% of the asking price.
This is deemed to be a seller’s market based on the lower number of homes on the market compared with this time last year. The general rule of thumb is that a neutral market, that is one which is neither a seller’s nor a buyer’s market, is one where the number of homes on the market is sufficient to provide a six months supply. In other words, it would take six months to sell the number of homes listed for sale. Citrus County, based on the most recent statistics as set forth in an excellent article by Michael D. Bates in the Home Front section of the Chronicle of June 4, 2017, is at a historically low homes-for-sale inventory with only a 4.2 months supply. New listings in April were down 9.1% from one year ago and a total number of listings is down 13.5%. This reduced inventory is the supply side of the immutable law of supply and demand. It applies with equal strength in Citrus Springs.
The demand side of the equation has increased due to continued immigration. More and more folks are finding out what a true paradise we have here on the nature coast and are moving here in droves to share in it. In addition, continued historically low-interest rates have allowed many more families to qualify for home financing. Baby boomers have in huge numbers reached that magic age where shoveling snow and ice has ceased to be an attractive way to spend a day outside in a biting cold gale. Continued relaxation of some of the most strict finance requirements is also making home ownership viable for more people with less than perfect credit. Despite the reduced number of homes for sale down 13.5% from April last year, the number of home sales continues to increase, up 3%.
The end result of reduced supply and growing demand is that the median sales price in Citrus County has risen to $138,825, which means that half of all homes sold for less and half sold for more. This translates to an average increase in value of 5.2%. A tidy increase in equity of $7,800 for the owner of a $150,000 home.
Real estate markets tend to be very localized in nature. What is true for properties in Citrus Hills may not be applicable to properties in Citrus Springs. And what may be the case in one section of Citrus Springs may not apply to another. Citrus Springs is a very diverse community with homes for sale for more than $600,000 and homes for sale for $60,000. Next month I will explore how all of these market factors have specifically impacted the values in the various neighborhoods within our community, including the impact of the new home building boom with over 70 new home permits in Citrus Springs already in 2017. In future articles, I hope to explore how the fair market value of property is established; what improvements actually increase your home’s value more than the cost of the improvement; how to maximize the sale price of your home when you are ready to sell.
Michael Cooper is a licensed realtor with Century 21 JW Morton Real Estate, Inc. He practiced real estate and municipal law in Maine for over 35 years, including owning and operating a title services company for 25 years, retiring in 2011 he resettled in Citrus Springs where he has been active in the community as Chair of the Future of Citrus Springs Committee in 2015 and as President of the Citrus Springs Civic Association since 2016.