Understanding the Statistics
In the Charlotte Sun, February 16, 2007, a front page article, “Charlotte housing market shows life€, tells an incomplete story. This is no fault of the writer, Bob Fliss, the newspaper’s Business Editor. Bob is an excellent reporter and his informative business articles are interesting and valuable. Nevertheless, Bob can only report on data that is supplied to him.
The number of sales recorded and the median price does not tell the entire story about the Charlotte County housing market. While sales in much of the state are way down and median price is lower, it seems that Charlotte County is fairing much better.
Tell that to home sellers!
Looking a bit closer at the data, one finds that while buyers are still purchasing homes at prices they can afford, they are getting a whole lot more for their money. Take for instance, PGI.
In January, 2004, 17 homes were sold in Punta Gorda Isles. The median price was $395,000. For that money the buyer got a 3/2/2 (three bedroom, two bath, two car garage) 1,678 square foot home with a swimming pool on a sailboat canal, built in 1968. That month the lowest price home was a 2/2, no waterfront, no pool for $147,000. The most expensive was a 3/2/2 pool home with sailboat water on Casey Key Dr. that sold for only $673,000€¦ quite a bargain by 2006!
One year later, January 2005, after Hurricane Charlie, there were 13 homes sold in PGI. The median price was $500,000 and that home was 3/2/2 with pool, 2,170 sq ft, on a powerboat canal, built in 1990.
By January 2006 prices were out of hand. The huge wave of buying was just behind us, but sellers and buyers had yet to realize this. Only 5 homes sold in Punta Gorda Isles, Florida that month according to the local MLS, but the median price was $815,000 for a 1977, 3/2/2, 2,195 sq/ft pool home on a powerboat canal.
Last month, January 2007, reality had set in. The number of unsold homes was way up and prices had been falling for some months. Buyers were still able to afford a nice home but they had many more choices and were met with sellers who were ready to deal. That month the median price of homes sold in PGI was $510,000. The home was a 3/2/2, 1,772 sq/ft pool home on a sailboat canal, built in 1983.
Again, it could be argued that these stats only tell part of the story. The median price homes in 2006 and 2007 were comparing apples and oranges. The $815,000 home sold in 2006 was over 400 sq ft larger and had a bit more waterfront. Yes, it is six years older than the median priced home in 2007 but does all the rest add up to $305,000 more in value?
Let’s look at the three PGI homes sold in 1/2007 that came in over the median price. For $520,000 a lucky buyer owns a home built in 2000. It is a 3/2/2, 2,007 sq/ft pool home on a sailboat canal. It is not quite as large as the 2006 home for $815,000 but it is newer with modern design and more strict codes. The seller was asking $575,000 and came down over $50,000.
The next more expensive home sold in 2007 was on the market 346 days before being sold. The original asking price was $759,000, reduced to $695,000 and sold for $550,000. It is a 3/2/2-1/2 pool home, 2,283 sq/ft on a sailboat canal. The home was built in 1981. The description of the home in the MLS tells a lot: Amazing long wide endless view of water and mangroves. Older spacious home with unlimited possibilities. New roof, AC, pool cage and electric shutters. Great storage areas, modern open kitchen, corian counters, big master bath plus€¦
The most expensive home sold last month in PGI was listed for $790,000 and sold for $686,000. It is a 3/2/2-1/2 pool home, built in 2002. It has 2,337 sq/ft of living space under air. The home is on a powerboat canal. The description: LOOKING FOR LUXURY? YOU HAVE FOUND IT HERE. WIDE VIEWS OF INTERSECTING CANALS, 10 MINUTES TO PEACE RIVER. THE KITCHEN HAS PULL OUT PANTRY SHELVES FOR ADDED CONVENIENCE. CENTRALLY LOCATED COOK TOP RANGE WITH RESTAURANT-STYLE HOOD. HUGE POOL WITH SPA€¦
This most expensive home sold in January 2007 compares favorably to the median priced home sold in January 2006. It is slightly larger but much newer. They are located very nearby and even use the same canals to access Charlotte Harbor. For $129,000 less money the buyer in 2007 got a whole lot more home than the buyer in 2006€¦. A larger house built to more stringent codes, an extra half bathroom and up to date design.
This is happening all over the county. While the price of a Punta Gorda Isles, FL waterfront home magnifies the drop in home prices, the same thing is happening in Rotonda, Port Charlotte, Englewood and Deep Creek. Last year at this time Andy and I had a difficult time finding a nice home in Port Charlotte for buyers in the $150,000 – $175,000 range. Now, even better homes are being offered at less than $150,000. These buyers can still afford the $175,000 home but they will get a lot more for their money!
The median price of homes sold has not changed very much because qualified buyers still have the same income and available down payment. When they apply for a mortgage the loan officer tells them they are in the same price range as last year. Only now they have more choices and are in a better negotiating position. Investors are a much smaller segment of the buying market and land sales have plummeted.
Home buyers are slowly returning to the market and Charlotte County will see a more “normal€ real estate market in the coming years. Most homes sold will be for personal use rather than investment. Land sales will also level out with prices moderating as buyers select from a huge inventory for that parcel on which to build their dream home in paradise.
This is a great time to be a buyer of real estate in Southwest Florida. There are bargains galore and the statistics only tell part of the story.
James B. Mulligan, Licensed Real Estate Broker
18245 Paulson Dr.
Port Charlotte, FL 33954
Jim Mulligan (941) 456-3034
Andy Leonard (941) 662-0033
Featured Homes and Lots For Sale In Southwest Florida
Sellers – Know what your Southwest Florida home is worth in today’s market. Click here for a FREE, NO OBLIGATION MARKET ANALYSIS of your Southwest Florida Home.