Inventory of houses and condos in the Vero Beach FL Indian River County area moved up 1.7% from 2631 units for sale in September 2011 to 2678 in October. However, inventory has decreased 15.7% from October 2010. Overall county-wide sales decreased 15.6% compared with last month but increased 15% over October 2010. Sales have increased year-to-date in all 5 categories including Hutchinson Island
Since the peak inventory in January 2008, we have established a pattern. Inventory has peaked just after the first of the year when the tourist season starts and moves down through the first half of each year to bottom out in midsummer, and then start to rise again. In the last 3 years, the increase in inventory has been quick to turn up after the winter season sales, but this year inventory has continued to fall until October, which was the first month of inventory increase this year. Sellers may have been staying away from a declining market but are now realizing that our area is at or near the bottom and poised for a recovery. Cash sales comprised 64% of the total sales, which is the same as September and up from 53% from a year ago October 2010. Distressed sales consisted of 27% of the total, which is low compared to a year ago and about 10% lower than last month. Distressed sales include both short sales and bank-owned homes. We believe the demand for homes will continue to increase in the near future as mortgage rates are exceedingly low, home prices are at or near the bottom, and area populations are increasing.
New construction overall is at the lowest it has been in the last 10 years, but buyer traffic in new subdivisions has picked up along with increased sales which may theoretically decrease demand for resale homes. New home sales increased 5.8% in September (the latest month for which figures are available) which was the first increase in 5 months.
However, sales of new homes may be short lived as bank foreclosures are expected to rise over the next year as the banks and Florida Courts better synchronize. Foreclosures in 2011 were substantially lower than 2010. Distressed sales nationwide and inFloridaare expected to go back up over the next 2 years and reach 1.4 million nationwide in 2013. So far close to half of the foreclosures have come from private banks as the government seems to have been holding back Fannie Mae, HUD, and Freddie Mac foreclosures. This will change over the next 2 years. However, even with this surge, there should not be much increased pressure downward on prices like there has been in the past because the actual number of liquidations will be smaller. The government which controls Freddie, Fanny, and HUD is not likely to allow a flood of foreclosures to hit the markets and again cause a market housing crash. That lesson has been learned.
