First of all, we’re not all going to die. Well, eventually we will die, but probably not from exposure to real estate. Second, this too shall pass.
The turning points in the real estate recovery are s-l-o-w and when they happen, go by with little fanfare.
It’s been a rough market for some time but there are particular neighborhoods that were hit especially hard. There were a handful of communities that were built or contracted at just about the time the switch was flipped and the market headed south. To say that some were hit hard would be an understatement.
In general, most consumers realize that there were real estate speculators and investors in the market. What most consumers don’t realize is that those speculators didn’t just buy a home and roll the dice; they bought multiple properties, even whole buildings. So a perfect storm of excessive real estate, purchased by speculators for imaginary homeowners hit the valuation ceiling and a blood bath began.
Distressed real estate piled up for sale and the inventory loads swelled to years, sometimes decades. More property came on the market than was selling and for a brief period of time, nobody was buying.
Here’s the thing about the real estate market, it’s cyclical and ever changing. Eventually no matter how ugly it got, it wouldn’t last. The inventory would sell off either by price adjustment, short sale or foreclosure and the neighborhood would stabilize. That’s been the case with many of the communities mired in the thickest of market struggles.
Dare I mention a community by name? It’s been a while since I’ve enjoyed a complimentary full page “I hate Chris” tantrum ad in the paper so I think I’ll roll the dice. It’s good news and possibly even great news, so what’s not to love?
Existing resale home inventory has been reduced from several years to only several months in both Village Walk of Bonita Springs and Bella Terra of Estero. They’re two communities that had, at the onset of their construction, more than their fair share of investors and plenty of growing pains. They’ve actually worked through the majority of their tribulations, put them into the past and have become the poster children for market recovery.
Consider this; a balanced real estate market is approximately six months of inventory. With approximately 10 months of inventory in each of the communities, they’re officially teetering on the edge of being a balanced market as a whole. That’s not even taking into account the hefty number of pending sales that will shave months off of the inventory as they close sale.
The majority of the product offered in both of the communities is in the faster paced $400,000 and under market which accounts for about 74 percent of all sales in the MLS in the last 30 days.
Not every community is as fortunate as Bella Terra and Village Walk. If you’re wondering “What about my real estate?” and you didn’t know the swiftest moving price point or the absorption rate for your neighborhood, you’ve now got some important questions to ask your real estate agent.
And no, I have no listings to peddle or investment interests in either community. It’s simply good news, deal with it.
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Chris Griffith is a real estate agent at Downing-Frye Realty Inc. in Bonita Springs. If you have a question about local real estate or Bonita Springs, e-mail her at chris@LifeInBonitaSprings.com.