2005 Home Prices UP in Florida

According to the Florida Association of Realtors, the median price for existing single-family homes in Florida continued to rise in December 2005, reaching more than $245,000. Compared to the statewide median price of $194,000 in December 2004, that is an increase of over 25 percent. Nationally, the median price is $225,000. The “median” is the midpoint, which is a typical market price where half of the homes sold for more and half for less money.

The rate for a 30-year fixed-rate mortgage averaged 6.27 percent in December 2005, up from the average rate of 5.75 percent in December 2004. In Florida, in spite of the rate increase, more homes were sold in 2005 (248,500) than in 2004 (242,500).

The state’s population grew by more than 400,000 in 2005, or about 1,100 people a day, according to research done by the University of Florida. The new residents include the baby boomers, some of whom are inheriting record amounts of wealth. Jobs are bringing them here too. Florida has one of the strongest job markets in the nation. Also, Florida offers what more people want -- an optimal place to live because of its great climate, world-class recreation, leisure activities, and job opportunities."

The bad news….home prices have increased rapidly while salaries have not, making it difficult for the average worker to qualify for a loan. To buy a $225,000 home, a family must have at least a $70,000 annual income (assuming 10% down and a maximum of 30% of monthly income spent on house payments). For the typical school teacher, firefighter, policeman, nurse --- those homes are unaffordable. The gap is now so wide that it is more like a canyon. The good news…it is easier to afford homes in Pensacola than most other areas of the state.

Many factors affect future home sales, but at this point in the year, it does not appear that 2006 will be as dynamic as what we saw in 2005. We welcome your comments --- post them here, or email them to joe@stukey.com.

Aircraft Carrier USS Oriskany About to Sink

After more than a year of delay, we now expect the USS Oriskany to be sunk in the Gulf of Mexico about 23 miles off the coast of Pensacola, Florida. It appears that the Environmental Protection Agency has given the final OK to send it to the bottom of the sea. At this writing, the Oriskany is in Beaumont, Texas where it was towed from Pensacola to wait out the 2005 hurricane season. The 888-foot aircraft carrier will lie in its final resting place, creating a one-0f-a-kind artificial reef that will not only attract sea life but will be the center of attention for scuba divers and fishermen from around the world. And as we should know by now, vacationers stimulate the real estate rental and sales markets. Economic benefit from visitors in the Pensacola area is estimated to be about $90 million per year. I hope that is a good number, because about $19 million has already been sunk into getting ready to sink it. Glub...glub. When will it sink? No later than May 2006 -- otherwise it could be sent back to Beaumont before the storm season starts in June! Check back with us for updates. And don't forget to visit us at www.stukey.com, or email me at joe@stukey.com.

Fort Pickens at Pensacola Beach to Open

Visitors and tourists are a very important barometer for the real estate market in Northwest Florida. Fort Pickens, one of the 10 most popular national parks, is scheduled to reopen in 2006, in the April time frame. Initially, visitors will either have to walk, bike, or go by boat to get into the park. The 4.5 mile road leading into the Gulf Islands National Seashore was destroyed by Hurricane Ivan in 2004 and made even worse by Hurricane Dennis in 2005. The road going from Pensacola Beach, east to Navarre Beach, is also closed. To repair both sections of roadway is expected to be in the $20 million to $30 millon range, and construction may start in late summer. The fort itself held up well, but the wind and salt water killed as many as 1000 trees and damaged several buildings and their exhibits. Those buildings are currently being restored. For more information about popular local tourist attractions, visit us at www.stukey.com.

Real Estate vs 2006 Hurricane Season

In 2004, the score was Real Estate "1", Hurricanes "0". Hurricane Ivan created a fantastic real estate boom in Northwest Florida. In 2005, it was Hurricanes "2", Real Estate "0". After Dennis and Katrina struck the gulf coast, some people said they had had enough. We don't know if any storms will affect this area in 2006, but we now know the official forecast. Dr. Gray's group is forecasting another active season. And the real estate market is waiting to see what happens. I would like to hear from the people who are selling right now. What's the reason why your house is for sale? And, are you leaving the area? Send an email to joe@stukey.com or visit our website www.stukey.com and select "contact us".

2006 Northwest Florida Real Estate Market

Looks like there will be plenty of property for sale around Northwest Florida for a long while. The market is definitely a buyer's market now. The statistics speak for themselves. The trend started in 2005, right after Hurricane Dennis. At that time there were about 1200 houses for sale in the Pensacola Multiple Listing Service. Within weeks after the storm the numbers started to climb. Now the number of houses for sale is hovering around 5,000. Less than 400 of them sold in January 2006. Even more interesting, is that most of the houses sold were priced at less than $200,000. So, I think that indicates that a lot of people are ready to move away, at least away from the water, and that prices are now too high for many local residents to afford. Come back to see how the listings and sales statistics look at the end of February. What would you expect to see? Send an email to me at joe@stukey.com or visit our website www.stukey.com.