The Gainesville Alachua County Association of Realtors welcomes you to beautiful Alachua County, Florida. We want the process of settling in to your new hometown to be as enjoyable as possible. This article has been written to take the mystery out of the Gainesville Real Estate market and offer advice that may find helpful as you begin the process of finding your new home.
Recent Trends
The real estate market for single-family homes in Greater Gainesville has seen a lot of change since 2008 (see Figure 1), and I’m very happy to report that the market has rebounded considerably in the past few years.
The first variable, closed sales, is the total number of sales transactions which occurred during that time period. This includes cash sales, financed sales, short sales distressed sales etc. The number of sales has been steadily increasing since the beginning of 2008.
The second variable, average sale price, steadily declined from $246,746 (January 2008) to a low of $167,604 in February 2013. Prices then began to recover and have steadily done so through the end of 2015. In fact, the average sale price in December was $222,189. That’s up 11.3% from December 2014.
The third variable, inventory of active listings, is an indicator of how quickly homes are entering and leaving the market. The trend line shows how many homes were actively on the market at any given time, and it’s pretty obvious that the inventory peaked in July 2010 (2061 homes). Since then it has steadily declined and on the last day of December 2015 there were 1024 active listings on the market in Alachua County. Many experts believe that a market that is balanced between buyers and sellers will have approximately 6 months of inventory available for purchase. The inventory available in December 2015 is roughly 4.4 months worth of supply, meaning that if no new properties were listed, the supply would be completely depleted in 4.4 months. For the sake of comparison, there were 5.4 months worth of supply in December of the preceding year. That’s a 19.2% drop in supply in one year.
Where is the Market Going?
The next logical question is where will the market go from here? The National Association of Realtors® (NAR) Chief Economist Lawrence Yun believes that steady economic growth will result in more home sales in 2016, but declining inventory will result in increasing prices. Interest rates for 30-year fixed mortgages will likely increase to 4.5% by the end of 2016, but increasing wages may offset the interest rate increase.
Locally we are seeing an increase in new home construction, but it is somewhat hindered by a shortage of subcontractors. Anecdotally, I’ve spoken to a number of lenders in our area who believe that the interest rates for 30-year fixed loans will stay in the low to mid 4’s for the remainder of this year. The take home message is it’s a great time to buy but you have to be prepared to jump when you find the house you really want.
Tips for Buying in Greater Gainesville
My best advice for Buyers coming into the Gainesville area is to do the following:
- Have a qualified lender look at your credit and pre-qualify you for a mortgage. Get it in writing.
- Find a good CPA and let them advise you on how much you should truly spend on housing based on your personal finances.
- Once you’ve done steps 1 and 2, interview a few Realtors who specialize in residential real estate in the Gainesville market and work with the one with whom you feel the most comfortable. Buying a home in a new town can be stressful and you need a trusted expert to help you with the process.
- “I’ve been a Realtor in this area for 12 years and even today I won’t go into a personal real estate transaction without the advice of a local, qualified real estate attorney,” said Dave Ferro, 2016 Chair of GACAR. Bottom line? Have an attorney legally advise you throughout the transaction. Closing attorneys typically work for the Sellers. If the Seller has legal representation, shouldn’t you? Some people confuse the roles of Realtors and Attorneys. “I believe that it’s wise to have both.”
- Once you have taken all of these steps, go look at houses and be prepared to make an offer when you find the one you like the best. Trust your team of advisors and enjoy the process!
The data presented here are for single-family homes only. If you happen to be in the market for a townhouse or a condominium, follow the same steps above but hire a Realtor who has experience dealing in those products specifically. That Realtor should be able to provide you with historical trend data for those property types.
From all of us at the Gainesville Alachua County Association of Realtors, welcome to the Greater Gainesville area!