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October 31, 2008

According to stats recently released by the Emerald Coast Association of Realtors (ECAR), sales of existing residential homes increased 17 percent in September as compared to the same time last year.

When Destin is separated from the rest of the market, sales of existing residential homes there netted a gain of 6 units, or about 19 percent. A total of 20 homes were sold here in September.

The data is assembled in keeping with the specifications set forth by the Florida Association of Realtors (FAR), ECAR's parent organization, and is based exclusively on Multiple Listing Service transactions conducted by its members. While the data includes all types of existing residential properties within ECAR's territory, including condos and single- and multi-family homes, other types of real estate are excluded such as unimproved property (land or lots), new construction, timeshares, condotels and commercial real estate.

The upswing comes at a moment when national forecasters continue to report weakness in many U.S. markets, mainly as mortgage financiers have begun tightening the reins of credit across the country.

The local real estate market is moving forward despite the dim national reports.

Lorena K. Spillar, Home Mortgage Consultant of Wells Fargo Home Mortgage in Destin, an ECAR affiliate member, says that there is still a great number of financing tools on hand to interested buyers even though financing may have tightened its lending criteria.

"The loans are still there," she said. And perhaps even more importantly, Spillars pointed out, the bargain-priced properties are still there, too. The apparent values these properties offer have piqued the interest of both investors and primary home purchasers the same.

"There are deals out there," she said. "And the good Realtors know where they are. They're the ones who do more than check (MLS) listings; they've visited them in person."

However, while tightening credit didn't seemed to put a damper on the market through Sept. 30, changes in lending policies that took effect Oct. 1 may make it harder for some buyers in the future to come up with the down payment lenders so often require.

"As of Oct. 1, there is no more down payment assistance," Spillars said. She explained that this means buyers of limited means who try to finance their primary homes through Freddie Mac or Fannie Mae after Oct. 1 must now come up with down payment funds on their own.

While Spillars said she didn't know if the change may have created a run on the market — where buyers rushed to close home deals before the Oct. 1 deadline — ECAR's numbers indicate that the price category most often associated with primary homes, the $200,000 to $249,999 range, led the way in September's sales.

But that doesn't mean investors aren't still in the market. Spillars said it's not unusual for condo owners to buy two or three units in a complex where they already own a unit, particularly if they go on the auction block.

"The prices are more realistic" than in past years, she said. "And the buyers know they're good deals."

On the other hand, new lending regulations that limit some investors to four properties has held some back from buying as many properties as they like.

"There are special 'portfolio' options that allow some investors to buy up to 10 properties," she noted.

While the stats don't necessarily indicate cause-and-effect, they may reflect this shift in financing regulations as sales of existing condo units, usually the darling of real estate sales, dipped along the Emerald Coast by one unit, or by about 2 percent. In Destin, however, sales of existing condo units were up by one unit. All told, 14 condo units were sold in Destin in September.

Whether or not the market's upward crawl will spill over into the fall months, a time of year real estate pros say is typically slower than others along the Emerald Coast, remains to be seen. ECAR's next set of numbers are due to be released Nov. 10.

This article was contributed to The Log by the Emerald Coast Association of Realtors.