The Bay County Real Estate doldrums continued this month, despite historically low interest rates. The Bay County Association of Realtors reported 92 sales of Single Family homes in November. 32 of those sales, or 34% of total volume, were foreclosures. There were 1771 houses on the market, which translates to 19.25 months worth of inventory. 30 year fixed mortgage rates ranged from 4.2% to 4.8%, and continued to climb into December. Bay County unemployment rose to 11.5%, up from 10.4 in November 2009. There were 146 foreclosure sales scheduled at the courthouse in November.
Our county continues to suffer from job layoffs. Sallie Mae is going through their final round of cuts, and rumor has it that Trane has laid off a full shift of workers. I fully expect the December and January unemployment numbers to rise. Unemployed people don’t buy houses, so I expect for sales volume and median prices to keep moving south. The high number of foreclosures also depresses overall prices. Rising interest rates are (I think) a minor factor in the market. Rates are still extremely low by historic standards. Tightening lending standards, however, may be keeping some buyers out of the market. It’s just hard to borrow money out there. As an example, a Realtor told me the other day that a major lender is knocking 10% off the top of the appraisals they receive and lending based on the reduced amount. The seem to think that the market is still headed down and want a cushion to protect themselves.
What do I see in the future? Right now, more bad news. An investor friend in Sarasota sees his market recovering, but I don’t see that trend in Bay County yet. We need jobs. I don’t see the market turning until unemployment turns around. I am also concerned about the “shadow inventory” of houses that have yet to go through the foreclosure process. I have not figured our a way to get an accurate handle on those numbers, but my gut feeling is that it is significant. More inventory means lower prices.
On the positive side, there has never been a better time to be a buyer. We are seeing a “perfect storm” of historically low prices and historically low interest rates. If you have cash and/or credit, the world is your oyster right now.
So do the economy a favor and go buy a house, will ya? 😉