MARCO ISLAND UPDATE (Part 3)
THE SHAPE OF THINGS TO COME
It is true that we have had a lot of negative factors working against us in the last couple of years, that has caused a cooling off period and we currently have double the normal inventory of properties in the area. Now the good news, according to NAR chief economist David Lereah, who spoke at the 2006 International Real Estate Congress and Expo in Miami this June, demand from foreign buyers and retiring baby boomers will continue to fuel the housing market in the Sunshine State, Noting that foreigners currently account for 15% of homebuyers statewide, Lereah said the U.S. import-export boom, a weak dollar and political unrest in Latin America will continue to lure foreign buyers to Florida. The 2006 State of the Nation’s Housing report from Harvard University’s Joint Center for Housing Studies highlights the significant contribution that foreign-born and minorities will make to overall household growth. “Strong household growth, combined with record incomes and wealth, will lift housing investments to new highs next decade,” says Eric Belsky, executive director of Harvard’s Joint Center. “Each generation is achieving higher homeownership rates, incomes, and wealth than the one ahead of it, with the leading edge of the echo baby boom now in their 20s and the baby bust now in their 30s starting off on especially high paths.” Researchers estimate household growth will accelerate to 14.6 million over the next 10 years from 12.6 million over the last decade. (Excerpts taken from Marco Island Area Association of Realtors e-newsletter). For more information, go to http://www.jchs.harvard.edu/
The truth is the buyers are out there. The majority of buyers have been sitting on their hands until they feel the prices have leveled off. Based on our research, average sold prices are moving into line with the average price growth curve (as discussed in the previous section). Thus, we are already seeing signs of increased buying activities on Marco Island and expect that this momentum will increase as we move into the winter season.
As the buyers return, you will see more end users vs. investors which will further help to stabilize our market. As this market regains momentum, I foresee a changing of the guard. Our real estate market has priced itself into a position that only the upper income bracket can afford. Many of these are aging baby boomers and foreign investors have expendable cash flows. Although not expressed specifically by the governing body of Marco Island, I believe that the structural upgrades that we are suffering through right now are in preparation for what this island will be in the future. Over the next 5-10 years, many that invested early will cash out on their treasure and this island will be transformed into an upscale paradise beyond its middle class roots. Collier Boulevard will reflect a luxury island resort with wide curbed streets lined with antique lamppost, winding sidewalks and finely landscaped medians. The available lots will be most likely be depleted. 1500 square foot one story homes will have given way to two-story boasting 2500+ homes. Waterfront homes and beachfront condos will become the hot commodity once again.
Let’s face it; they aren’t developing any more subtropical islands that offer miles of crescent beach and over a hundred miles of waterfront property within minutes of the Gulf of Mexico. Located in one of the richest counties in the nation, Marco Island is still one of the most desired locations in the country; coupled that with the fact that we are still reasonably prices in comparison to waterfront properties on the east coast of Florida, there is no doubt in my mind that we will regain our momentum and become a paradise that everyone will want to be a part of. Life on the island will be good… VERY GOOD!
It is true that we have had a lot of negative factors working against us in the last couple of years, that has caused a cooling off period and we currently have double the normal inventory of properties in the area. Now the good news, according to NAR chief economist David Lereah, who spoke at the 2006 International Real Estate Congress and Expo in Miami this June, demand from foreign buyers and retiring baby boomers will continue to fuel the housing market in the Sunshine State, Noting that foreigners currently account for 15% of homebuyers statewide, Lereah said the U.S. import-export boom, a weak dollar and political unrest in Latin America will continue to lure foreign buyers to Florida. The 2006 State of the Nation’s Housing report from Harvard University’s Joint Center for Housing Studies highlights the significant contribution that foreign-born and minorities will make to overall household growth. “Strong household growth, combined with record incomes and wealth, will lift housing investments to new highs next decade,” says Eric Belsky, executive director of Harvard’s Joint Center. “Each generation is achieving higher homeownership rates, incomes, and wealth than the one ahead of it, with the leading edge of the echo baby boom now in their 20s and the baby bust now in their 30s starting off on especially high paths.” Researchers estimate household growth will accelerate to 14.6 million over the next 10 years from 12.6 million over the last decade. (Excerpts taken from Marco Island Area Association of Realtors e-newsletter). For more information, go to http://www.jchs.harvard.edu/
The truth is the buyers are out there. The majority of buyers have been sitting on their hands until they feel the prices have leveled off. Based on our research, average sold prices are moving into line with the average price growth curve (as discussed in the previous section). Thus, we are already seeing signs of increased buying activities on Marco Island and expect that this momentum will increase as we move into the winter season.
As the buyers return, you will see more end users vs. investors which will further help to stabilize our market. As this market regains momentum, I foresee a changing of the guard. Our real estate market has priced itself into a position that only the upper income bracket can afford. Many of these are aging baby boomers and foreign investors have expendable cash flows. Although not expressed specifically by the governing body of Marco Island, I believe that the structural upgrades that we are suffering through right now are in preparation for what this island will be in the future. Over the next 5-10 years, many that invested early will cash out on their treasure and this island will be transformed into an upscale paradise beyond its middle class roots. Collier Boulevard will reflect a luxury island resort with wide curbed streets lined with antique lamppost, winding sidewalks and finely landscaped medians. The available lots will be most likely be depleted. 1500 square foot one story homes will have given way to two-story boasting 2500+ homes. Waterfront homes and beachfront condos will become the hot commodity once again.
Let’s face it; they aren’t developing any more subtropical islands that offer miles of crescent beach and over a hundred miles of waterfront property within minutes of the Gulf of Mexico. Located in one of the richest counties in the nation, Marco Island is still one of the most desired locations in the country; coupled that with the fact that we are still reasonably prices in comparison to waterfront properties on the east coast of Florida, there is no doubt in my mind that we will regain our momentum and become a paradise that everyone will want to be a part of. Life on the island will be good… VERY GOOD!
posted by Joe Bartos @ 9:46 PM
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