Editor's note: Contributing Columnist, Steve Nicklas, expresses his views and insights on various topics of local interest in Steve's Marketplace _______________________
Like fissures in a wall of ice, fragments of upbeat news are spreading through the relatively frozen financial markets.
The latest news came in the federal government's announcement to buy treasuries in the open market, attempting to further suppress interest rates. In the same breath, sales of existing homes in the U.S. surprisingly exceeded forecasts -- registering a pace not seen in years. Around the country, there are signs the real estate market is trying to heat up, according to CNBC.
Property prices have fallen so far that they may again appear to be attractive, according to reports. Sales are picking up in certain locations, with prices to hopefully soon follow.
The places with the most sales are those where prices have fallen the most. For instance, in Lee County, Florida, sales have increased 80 percent year over year. A caveat: The prices are half of what they were.
The same holds true for some other Florida markets that have experienced a run-up in hasty listings and low-priced sales, according to the consulting firm Fishkind & Associates. Property values in these locations have commonly declined 30 percent or more.
Granted, many of the real estate transactions are either foreclosures or short sales. In fact, about half of the transactions in the final quarter of 2008 were these so-called distressed sales. However, these sales at least remove from the excess inventory.
Here in northeast Florida in Nassau County, property values have declined over the past couple years by at least 20 percent, according to many experts. The declines vary depending on location, of course.
There are some bright spots. With incentives for first-time home buyers, areas with affordable housing such as western Yulee and on the west side should benefit. Construction of new homes and town homes has slowed locally, but there are still signs of activity on Amelia Island and in Yulee.
One other thing is working in the favor of the markets this year, as compared to last year. The comparisons this year will be more favorable, in contrast to the depths reached last year in many asset classes.
Like with existing home sales, it is easier now to exceed year-over-year comparisons -- since last year was so poor. When compared with these frozen-like conditions, any activity this year might seem frenetic -- and warming.
(Steve Nicklas is a financial advisor who lives on Amelia Island. He can be reached at 904-753-0236 or at thenicklasteam2@msn.com.) ________________
INVESTING IN TODAY'S FINANCIAL MARKETS
A four-week continuing-education class, "Investing in Today's Financial Markets," will be offered beginning April 7, 2009 at the FCCJ-Betty P. Cook Nassau Center in Yulee.
The class, taught by local financial advisor, Steve Nicklas, for the last seven years, will cover many aspects of the financial markets, including stocks and bonds and popular investments vehicles such as mutual funds. Sessions will be on Tuesdays from 6:30 to 8 p.m. Cost is $36, which includes all materials. Students must pre-register at the college and make checks payable to FCCJ.
The April 2009 class schedule is: April 7, Investing in the stock market; April 14, Investing in the bond market; April 21, Investing in IRAs, 401Ks and other retirement vehicles. April 28, Implementing a financial plan. The college can be reached at 904-548-4432.
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