What a June in PGA National !!!
We just closed on a 2600 square foot home in The Island at PGA National for over $700,000. We put a home on the market in Marlwood Estates for $799,000 and had a buyer we represented purchase it for 97% of the asking price in 12 days! We have 2 deals pending in the Club Cottages, 1 in Eagleton Cove, 1 in Townhomes of Marlwood, 1 in Burwick Estates, 1 in Barclay Club, and 1 in Lexington Green.
So, what is going on? My analysis is that there have been historic lows in new construction for 5 years running. During those 5 years we have seen a cleansing of excess builder speculation homes, excess builder land lots that have been built, investor speculation homes, and sellers who purchased a home who had to reduce the price to the current reality in order to sell their home.
The buyer who always purchases new construction now has extremely limited choices from which to pick. They must turn to existing homes that show the best and look like new. The Case-Shiller Report states that there is a ton of foreclosures and short sales coming and thus see a 10-20% drop in prices. Case-Shiller is correct on the never-ending short sales and foreclosures coming. However, what Case-Shiller fails to state is that there is a huge differentiation between ‘good inventory’ & ‘bad inventory’. When a buyer gives me their wish list, it usually goes something like this…. I want open & airy, master on the first floor, updated, nice view. The shorts sales and foreclosures tend to be dark and dreary, closed-off floorplans, dated, unpampered, and ugly views. Therefore there is an excess of ‘ugly homes’ but not a lot of ‘good looking’ homes.
A good-looking home that is marketed and priced well is moving fast and seeing some appreciation. What is sitting are the ugly homes, plus the excess inventory that Schiller reports is going to be more ugly homes, not new construction. The big difference is the quality of the inventory. It’s like going to the Festival Flea Market in Ft. Lauderdale and expecting to find Zenga ties and Henredon furniture. You end up being disappointed and just buy some goofy Happy Birthday cards and a big pickle at the Pickle on a Stick store.
Are prices going back to 2005 numbers? Not a chance. The free market is leveling out inventory through the normal cycle of supply and demand. We will end up seeing a little new construction and prices will go up a hair and then level out. Staging homes properly has never been more important. If you are a few years away from selling and want to do some updating, feel free to call and it will be my pleasure to help you choose what updating will help get a good return on your investment.