Amelia Island Residential Real Estate News & Opinion
______ The MLS sales data in this article is for single-family residential homes, condos, duplexes, and townhomes, “sold” properties that closed from October 1, 2007 to December 31, 2007 compared to the 4Q06, and for the full calendar year (January 1, 2007 through December 31, 2007 compared to the calendar year 2006), dwellings located on Amelia Island (MLS zones 1-6), according to data recorded in the Amelia Island/Nassau County, MLS). Note that MLS data may contain errors and is not guaranteed. _______
For the full calendar year 2007, the median sold price of residential dwellings (single-family homes, condos, duplexes, and townhomes) located on Amelia Island was about 5% higher than the median price of $400,000 for calendar year 2006 (see more details about the full calendar year sales data further below in this article). The median price means that 50% of the properties sold for more, and 50% sold for less.
For the most recent fourth quarter of 2007, the median sold price of residential dwellings on Amelia Island was 1.8% below the year ago period in the fourth quarter of 2006. On Amelia Island, Florida, the median sold price of properties in the dwelling categories of condos, duplexes, townhomes and single-family homes during 4Q07 was $395,000, compared to $402,500 during 4Q06, or a median sold price that was $7,500 less than last year.
The median sales price data seems surprisingly good, considering the glut of gloomy housing reports we all have been hearing for a very long time now, in the national media. Some local home owners may have expected to see large declines in the median housing prices for 2007.
Not to say that there aren't Amelia Island properties selling for substantially less than they would have fetched at the peak of the market. Those unrealized "paper gains" have diminished. No doubt homeowners have lost equity in their homes. Many sellers remember what "could have been" if they had sold in the hot market of 2005. Thus, some have difficulty being realistic about pricing their homes to sell in today's market, with the large supply of inventory for sale, and fewer buyers.
Homes selling today are those with the most appeal and benefits to the buyer, standing out more than all the others for sale in its competitive sphere -- i.e. homes that show the best and are priced competitively. Buyers can be very picky with so many choices, so it’s a very competitive environment for sellers. Some buyers are making really “low” offers, and some sellers choose to reject the low offers, opting to remove homes from the market and wait until a better market environment for sellers.MORE AMELIA ISLAND 4th QUARTER 2007 HOUSING DATA
There was a striking difference in housing sales activity on Amelia Island -- the actual number of transactions year-to-year -- during the fourth quarter, as well as a dramatic difference in days on the market. During the most recent fourth quarter of 2007, the number of sales of residential dwellings located on Amelia Island in the categories noted above, dropped from 132 sales in 4Q06, to 58 during 4Q07 – a 56% drop in the number of sales transactions. The time it took to sell a residential property that closed during the recent 4Q07 was an average of 152 days on the market, or around five months. By comparison, that's two months longer to sell a residential dwelling on the island for closings in 2007's fourth quarter, compared to 90 days on the market for closings during the 4Q06. So while Amelia Island housing's median prices have remained relatively stable to date, there are far fewer sales occurring compared to the previous year, and it takes longer to sell a home.
A BUYER’S MARKET ON AMELIA ISLAND
For sellers listing their properties for sale with Realtors® in the MLS, many properties lingering on the market with more motivated sellers, go through price reductions over time, but many property listings end up expiring in the MLS (most commonly a six-month listing agreement), or are withdrawn from the market, without a sales transaction.
So there you have it -- plenty of sellers (so lots of choices for buyers to pick and choose from), properties staying longer on the market, and fewer buyers willing to go forward with a purchase. It’s the same slow sales environment playing out around the nation. Amelia Island sales are slower in part from slow sales in “feeder” markets. Comments from local brokers indicate there reportedly are buyers waiting to purchase property in the Amelia Island area, but they have been unsuccessful in selling their property elsewhere, first. These buyers intend to move forward with a purchase here when they sell their existing homes in other markets, so it's a waiting game. Thus, there is pent up demand for Amelia Island properties.
Housing sales transactions (closed sales) have been very slow in the first two months of 2008 on Amelia Island. The recent passage of Florida’s new property tax legislation on January 29, 2008, to cut taxes, would not yet be reflected in the housing sales results for January and February (if, in fact, this new property tax amendment will have any measurable impact on the local real estate market). A look at Amelia Island properties listed in the MLS that have gotten contracts this year since January 1, 2008 ( i.e. “pending sales,”) indicates 39 residential properties went under contract during January 2008, and 52 residential properties during February 2008 (homes, condos, duplexes, townhomes).
The large supply of properties for sale, however, and weak demand (if buyers remain hesitant to commit to purchases), may put further downward pressure on housing prices in 2008. If so, how much? That remains to be seen. But note one of Florida's top economists, Hank Fishkind, Ph. D., has reported his belief that Florida's housing market has already "hit its trough and the recovery is underway."
As of March 1, 2008, there are 724 dwellings for sale located on Amelia Island (single-family homes, condos, duplexes, townhomes). For example, a buyer seeking a single-family home on the island with at least 3 bedrooms and 2 baths, sized in the 2,000 to 2,500 square footage range, currently has 66 island single-family homes for sale, listed in the MLS, to choose from. When broken down by price range, those buyers desiring a single-family home in the $300s located on the island currently have 14 homes to preview. In the $400s price range, buyers can choose from 21 island single-family homes for sale. Those who can spend in the $500s have 18 single-family homes listed in the MLS to take a look at within these same parameters (at least 3BR/2BA and sized 2,000 to 2,500 SF). In higher price ranges, there are ten homes for sale on the island from $600k up to a million matching this criteria. And in the million-plus range, there are only three single-family homes for sale within the square footage range of 2,000 to 2,500 square feet on the island, with at least 3 bedrooms and 2 baths.
MORE ABOUT AMELIA ISLAND CALENDAR YEAR 2007 HOUSING SALES DATA
For the full year, the median sold price of $421,871 for year 2007 on Amelia Island was about 5% higher than the median price of $400,000 for calendar year 2006. For the full calendar year 2007, 428 residential properties (homes, condos, duplexes, townhomes) sold on Amelia Island at a median sold price of $421,871, according to data in the Amelia Island/Nassau County MLS from January 1, 2007 to December 31, 2007. These properties were on the market for, on average, 122 days, or about four months. In 2006 on Amelia Island, 547* residential properties (single-family homes, condos, duplexes, townhomes) sold at a median price of $400,000, with average time on the market 123 days. Interestingly, the average time on the market for the full calendar years, in 2006 and 2007, was basically the same. But as noted earlier, during the latest fourth quarter ending in Dec. 2007, time on the market had increased to about 5 months. It’s gotten tougher to sell a home more recently.
SALES ACTIVITY REMAINS GOOD IN HIGH-END HOMES ON AMELIA ISLAND
Note that the slowdown housing sales activity on Amelia Island has not hit the high-end residential properties priced $1,000,000-plus. From 2006 to 2007, there was no drop, at all, in overall closed sales transactions. 41 properties sold on Amelia Island priced $1 million-plus during 2007, which was the same exact number of properties sold on the island during calendar year 2006. Of the 41 properties sold in the $1-million-plus price range in 2007, the average sales price was $1,696,781, versus an average sales price of $1,571,261 in 2006. The median price in 2007 was $1,550,000 versus $1,500,000 for the 41 properties sold in 2006. Thus, the prices for million-dollar-plus residences were higher in 2007 than the year before period.
LOOKING BACK TO THE HOT MARKET YEARS
Of course, we remember the booming Amelia Island marketplace, with property values soaring during 2003-2005. The marketplace couldn’t sustain its remarkable growth pace. In those boom years with high demand and low supply, sellers had the upper hand.
Let's glimpse back to 2004 and take a trip down memory lane. Here's an excerpt from an article I wrote about the Amelia Island real estate market back in August 2004...
"65% OF NEW LISTINGS PRICED UNDER $500K GET CONTRACTS IN 30 DAYS OR LESS, AUGUST 30, 2004...
Homes with a price tag under half a million in certain parts of the island (in closest proximity to the beach), are particularly desirable to today's buyer, and getting contracts at a feverish pace. The current environment for buying a single-family home (or a condo) on Amelia Island has become very competitive for prospective buyers. Some homes are getting multiple offers and are under contract in less than a week. After a busy spring real estate market, Amelia Island Realtors reported an onslaught of buyer inquiries from July into August...read the full article about the hot real estate market of 2004, "Amelia Island Homes Selling at Feverish Pace."
REMEMBER, REAL ESTATE IS A CYCLICAL INDUSTRY
With the cyclical nature of real estate, the shoe’s on the other foot now in 2008, in this buyer’s market. Buyers can be choosy, take their time, and negotiate harder. No doubt it’s going to take time for the equilibrium between the large market supply and buyer demand to come back into better balance.
In our micro-market, here on Amelia Island in northeast Florida, with local housing's median prices, to date, remaining relatively stable, appears to suggest the possibility that “location” -- i.e. coastal, island real estate -- may end up holding its value better during these stormy days, than many other real estate markets. If you live on Amelia Island, you are either at the beach or living within 2 miles of the beach from any point on this 13-mile long island, since the island is only about 2 miles wide. Amelia Island is attractive "location" property, being a Florida resort barrier island within commuting distance of the city of Jacksonville, and only 30 minutes to Jacksonville International airport.
For buyers waiting on the sidelines and thinking the Amelia Island real estate market may not have bottomed yet, it's very difficult to time the absolute bottom (or peak) of an investment cycle, be it the stock market or real estate market. Even the most savvy investors can not time the market perfectly. It’s a buyers market, and buyers with good credit can get their Amelia Island dream home under a million dollars, at a more affordable price than in recent years. (Remember, the high end of the Amelia Island market, homes above $1 million, have not been afflicted with slower sales in 2007). Those making a home purchase and in it for the longer-term (not seeking to buy and re-sell in a couple of years), will be buying when conditions are far more favorable for buyers than previous years. Bottom-fishing buyers waiting on the sidelines, hoping home prices will go down a bit more, run the risk of facing higher interest rates for fixed rate mortgages that could potentially wash away a home purchase price advantage (see more about this below).
JACKSONVILLE, FLORIDA REAL ESTATE MARKET PREDICTED TO RECOVER MORE QUICKLY THAN MOST OTHER MARKETS IN FLORIDA
Consider a recent article in Florida Trend magazine. Florida Trend published the "Residential Real Estate 2008 Outlook -- Bottoming Out: The Residential Market Will Likely Hit Its Low This Year," dated 1/1/08. In this article by Richard Westlund, he interestingly noted three real estate markets in Florida that "are most likely to attract residents." Jacksonville, Florida is one of these three "lower-cost" markets in Florida that are anticipated to "recover more quickly." Note that the Amelia Island area/Nassau County, FL is included in the Jacksonville MSA --Metropolitan Statistical Area). Read the Florida Trend article now.
Also see example (given by the chief economist of Lending Tree), that indicates the following: a buyer who waits to buy and gets a home for 10% less down the road, is really not gaining anything when considering the bottom line costs when financing is factored in, since the 10% less for the purchase price of the home will be washed away by a one point increase in interest rates...see the example in "Fence Sitting Buyers -- "Ignore the headlines."
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About the author -- W. B. Lawson has lived on Amelia Island fourteen years and writes tourism, lifestyle, and real estate articles, is a Florida real estate licensee (having attended the Florida Real Estate Institute), and is a member of the National Association of Realtors, the Florida Association of Realtors, as well as the Amelia Island/Nassau County Association of Realtors. Send eMail to contact@ameliaislandliving.com.
MLS information may contain errors and is not guaranteed.
Note: * The Marsh Cove apartment/condo conversion has been omitted from the 2006 transaction data, since it skewed median prices for 2006 artificially lower. Note that there are some Amelia Island Plantation "in-house" properties listed with the Plantation's internal real estate office exclusively, and these properties are not included in the Amelia Island MLS data/statistics, since they are never recorded in the MLS.
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THE AMELIA ISLAND COASTAL LIFESTYLE
Amelia offers small-town coastal living with 13 miles of beaches, the charming historic district of Fernandina Beach, world-class golf, and luxury resorts -- the Ritz-Carlton and Amelia Island Plantation. Yet Amelia is located close to the big-city amenities of Jacksonville, Florida with the Jacksonville International Airport only a 30-minute drive away.
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