Editor's note: Contributing Columnist, Steve Nicklas, expresses his views and insights on various topics of local interest in Steve's Marketplace _____
The topic of the real estate market and accompanying reports of positive news have not appeared in the same sentence for some time.
This may be changing, however. Several reports released this week reveal positive developments. While temporary in nature, these are the types of favorable trends necessary to revive this once-mighty, but now moribund, sector.
For instance, new home sales and existing home sales in the U.S. both climbed unexpectedly in September. New home sales bounced off a 17-year low in August to post a 2.7 percent increase.
And existing home sales rose 5.5 percent in September -- to the highest level of activity in more than a year. Home sales in the west contributed the most to the increased activity. This could be due to foreclosure sales in California, Arizona and Nevada, however.
While the rebounds are probably unsustainable, with a glut of housing inventory and a slowing economy, they nonetheless may provide a glimmer of hope for the future. To complicate the housing picture, banks and mortgage companies have tightened their reins on lending due to financial uncertainties.
Mortgage rates declined this past week, after rising for some time. This could help spur on real estate activity -- purchases and refinances -- if it persists. The reduction in rates is partly due to government intervention aimed at loosening up the credit markets.
In Florida, the real estate market has suffered a severe decline after soaring above most U.S. markets for years. However, a surprising calm has emerged here.
According to a new University of Florida survey, so-called real estate experts here have not lost faith. They maintain that Florida is “a place to be and a place to invest,” according to the report.
The survey focused on real estate trends in the state. It is based on the responses of 392 property appraisers, brokers, and other service providers.
A key concern among those surveyed is the availability of credit to finance real estate activity. This concern extends from the global credit crisis.
While Florida's downturn is worse than most states, the appeal of moving here remains -- especially for baby boomers seeking out a mild climate, beaches, and extensive outdoor activities including fishing and golf.
Unfortunately, the sudden downturn in the stock market along with the decline in housing values has forced some soon-to-be retirees to reconsider or delay their plans. This will continue to impact the annual migration here from retirees or second-home buyers from other parts of the country.
The respondents to the University of Florida survey expressed hope that the shockwaves from the credit crisis will not derail the recovery in the real estate market here. Respondents indicated that they are “keeping the faith that they may have seen the worst and the shock will not be overwhelmingly severe.”
Faith. Hope. Confidence. These are words we can cherish until a true recovery unfolds in the financial markets.
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(Steve Nicklas is a financial advisor who lives on Amelia Island. He can be reached at 904-753-0236 or via eMail at: thenicklasteam2@msn.com.)