Sales activity for the month of May was above average with 23 properties closed (SF-11, Con-10 & Dup-2) compared to 27 (SF-14, Con- 9, Dup-3 & Lot-1) in May of last year.  Year to Date through May, in number of properties sold, we are running about 15% behind 2008 for the same period. Looking at the trends it looks like single family homes and duplex, average and median sales prices, have dropped a little but condos have dropped significantly since the end of 2008.  The good news is the number of properties under contract is still very high at 50 (SF-24, Con-20, Dup- 3 & Lot-3) which means most of those will be closing over the next 30-60 days.  It looks like the average sale price of property on the island has dropped about 15% since December of 2008 with single family and duplex’s down less then that and condo’s, taking the biggest hit, significantly more then 15%. The other issue regarding condos is that financing is very difficult because the banks are requiring appraisers to use comps that are no more then 6 months old.  Since there are only on average 4-5 sales a month in condos and most of them being in the low end of the price range (and a higher portion of distressed sales have been in condos), finding good comps that are new enough to use has been very difficult.  Financing of single family homes and duplex’s has not had that same problem.

The inventory continues to drop with it currently at 575 (SF-292, Con-195, Dup-42 & Lot-46) which is a positive sign for the island market.  If you look at the Inventory vs absorption rate chart, you can see that because of the low inventory level & the healthy sales rate that we have the lowest months of inventory available since the 4Q of 2005.  Again, the normal inventory on the island is in the mid to high 400’s.  If this inventory trend continues it’s good news for the market and will help prices to start rising sooner.
Looking at properties in trouble (short sales, foreclosure’s & bank owned) they are still under 5% of the inventory on the island while the mainland has 25% of the inventory in this category.  These properties are the basis for the fluctuation in prices up and down (when I say we’re bumping along the bottom) because they are mixed in with arms length transactions. Once these distressed properties get off the market (I predict they will be off the market by the end of the year) we will have all arms length transaction sales which will reflect the actual market and will be the base for future appreciation.

There are some terrific buys right now from starter homes to luxury homes. In Frank & Al’s Great Buys this month all four properties are listed at great prices. The property at 105 Mangrove is one house from the beach with a heated pool and a great rental. A third bedroom could be added very easily which would increase the rental production of this property with very little expense. The last four properties sold west of gulf drive within the last 6 months have sold in the high $500’s and low $600’s and not as good a property as this one.  If you’re looking for a starter single family home 204 Archer Way is a great buy.  Just one house east of Gulf Drive, it’s a cute 2BR/2 bath “cottagy” remodel that is a block to the beach.  For the buyers looking for a Luxury Direct Gulf Front 108 36th St (Palm Gables Unit #4) has great value.  This 3 bedroom/ 2.5 bath direct gulf front with panoramic gulf views, has so much custom finishes you have to see the property 6 or 7 times to remember it all.  Designer furnishings from Robb & Stucki and custom painted murals can’t describe the workmanship in this Condo.  If you’re looking for luxury with the size of a home (3100 sq ft & 2500 sq ft) then 200 & 202 38th St, a two unit condo with individual 2 car garages, elevators and pools with gulf views is the property for you. As you can see from starter home to luxury gulf front there are some wonderful buys to take advantage of.

Again, this is certainly the time to buy if you’re in the market for real estate on the island. Another positive sign regarding the market is that over the last 30 days or so I’m seeing sellers rejecting outright low ball offers from buyers just looking to take advantage of a desperate seller.  Most of the desperate sellers seem to be gone.  Sellers seem to be willing to only go down in price so far and that’s it.  It takes both a willing seller and buyer to make the market and now that sellers are pushing back we may be getting to a balance in this market.