Uncertainty

Uncertainty in the market place is at an all time high. Everywhere I go folks are talking about the economy, gas prices, real estate, the Wall Street mortgage debacle, the election, and the overall state of affairs in general. With regard to Real Estate I am constantly being asked, “When are things going to turn around? Have we hit bottom yet? Is there light at the end of the tunnel?” My standard response is that “I don’t know anything. If I did, I would have bought two or three hundred lots in 2003 and sold them all by August of 2005.” However, I do have an opinion and my opinion is……

I would now like to share that opinion with you- our clients, friends, and neighbors, and I apologize in advance for being a bit wordy, but as most of you know, that’s my nature. First, a little historical recap. Brigitte and I have been selling Marion County real estate since 1993. She began in 93- myself in 99. From that time to about 2003, inventory levels of homes for sale, county-wide, ranged generally from 3500 to 5000. That began to change in 2004 and drastically changed in 2005. During that red hot market inventory declined to a multi-year low of approximately 1188 homes by June of 2005 and then began to climb; increasing every single week to it’s peak of 7967 homes in November of 2007. On the demand side there are 40% fewer buyers today than a year ago and 60% fewer buyers than 2 years ago. That’s a 650% increase in inventory with half the buyers. You do the math.

Now let’s talk lots. Marion County lots sat dormant in several major subdivisions such as Marion Oaks, Silver Springs Shores, and Rainbow Lakes Estates in Dunnellon for 30 years. Up until about mid 2003, you could have bought every lot in those locals for $1,000 to $5000; $8,000 Tops would have bought them all. Then the market began it’s move and the price of lots escalated to the $30,000 to $50,000 range ($75,000 to $125,000 for an acre) before topping out in late 2005. This was a price advance, in many cases, of 10 fold. There were 9300 lots sold via our MLS in 2005, 3300 in 2006, approximately 1200 in 2007 and today you can hardly give them away.