The housing crash of several years ago continues to impact our collective psyche, though reality is quite different. Across the country, particularly in places like Sarasota, Florida, home values are on the rise, and, are experiencing a recapturing of their equity positions, even to the point some properties are now worth much more. The reasons for this phenomenon are several, including the smaller percentage of distressed property listings, which are comprised of short sales and foreclosures, historically low interest rates, remodeling of credit scoring, and, time.
Put another way, the economy though still slow, is growing, and, buyers are active, which in turn, encourages more owners to sell. The entire dynamic creates circumstances which are self sustaining, meaning that going into the foreseeable future, home values will continue to rise. What's more, the fact that so many owners chose to remodel and improve rather than market and sell, also contributes to increased values.
Here in Sarasota, the recently released real estate statistics show that sellers remain in control of the market. In fact, April set a record for sales across Sarasota County, with an astounding 1,224 transactions, breaking the previous record set in the same month in 2004 by one sale. Median home prices rose by 13.1 percent from April 2014, reaching $221,990, for single family residences. During the same month, distressed properties accounted for only 15.6 percent of all active listings, far below figures of previous months.
Understanding the Local Real Estate Market
Currently, in the area, sellers have the upper hand, precisely because there are more buyers than properties available. The number of buyers and sellers are near parity, and, with such low interest rates, a variety of new loan products, and loosened lending standards, along with rising home values, and with such factors at-play, that trend will likely continue for some time.
"If you want to know the real value of your home, look across the street. Nearby homes, stores and facilities play a huge role in determining your property value. A healthy neighborhood guarantees a steady rise, while an unhealthy neighborhood will enter a vicious cycle." --Business Insider
New construction is also underway in many parts of the county, which include all types of housing, ranging from new condo communities to single family homes in master planned communities. Not only are new communities being developed or expanded, but the influx of new residents relocating from other states continues, which is why the Sunshine State became the third most populous state in the nation, with over 1,000 people moving here, on average, daily.
Five Signs Your Home Value has Increased
All of these factors, as well as other contributors, are causing home values to increase. If you are wondering whether or not that is true for your own home, all you need to do is look at these five signs to know for sure:
- Existing businesses are doing well and more are opening. When local businesses are experiencing increased sales, and more businesses are opening and/or expanding, that directly impacts the value of your home. Business open and expand in areas that are growing or will grow. In fact, a recent study concludes that homes near small businesses grew in value by 54 percent, compared to homes not close to small businesses.
- Surrounding neighborhoods are increasing value. The way to know if this is true is to do a little research, and, it won't take long. Look at the past several months' home sales and if you see similar properties selling for a larger price, then you know those neighborhoods are increasing in value. The reason this is important is because when you buy a home, you buy into the neighborhood. A healthy neighborhood means good things for your own property--it's that simple. You'll also want to look at new listings, not for their asking prices, but for the number of new home for sale.
- Nearby homes are selling quickly. Speaking of new listings, take a look at their D.O.M., or, days on the market. If that's a short time period, then your home value is increasing. The shorter amount of time homes are on the market, the better. Just remember, though, the condition of those homes is just as important.
- Your selling agent says so. If you are considering selling, speak with a local, experienced real estate professional. You'll get a ballpark figure and with a C.M.A., or comparative market analysis, you'll have a really good grip on the value of your home. You can also increase your property's value by investing in a few home improvements.