Last week I reported that in Venice we are seeing the first signs of price appreciation; homes are selling at 2002/2003 pricing; the supply of homes is at 10 year lows. Venice is mending, but it is years from a full blown recovery.
Rising prices have less to do with pent-up buyer demand, more to do with low inventory - 622 homes for sale at the end of August - 28% less than a year ago. Why is inventory low? There are more buyers who want to buy at the bottom of the market, and there are fewer sellers who want or are able to sell. Why are prices rising? More buyers are chasing fewer homes. Where are pricing rising? It's concentrated at the lower end of the market, where short sales/foreclosures are more prevalent.
What about Pelican Pointe? As the graph reflects, prices at Pelican Pointe have stabilized, we have bottomed out. Average square foot sold prices are pretty much holding their ground; $146/sq. ft. (Sept 2011 – Aug 2012) versus $149/sq. ft. (Sept 2010 – Aug 2011). Although it represents a modest 1.9% decline, since the beginning of this year prices have firmed up at 2003 price levels. The number of homes for sale at Pelican Pointe is low. There is only a 5.5 month supply --- 22 homes for sale --- one year ago there were 39 homes for sale! Under normal economic conditions when supply is low, prices should go up. That hasn’t happened at Pelican Pointe. Continued weak economic conditions, high unemployment, competition from new housing communities, sellers unwilling or unable to sell, and interest rates likely rising after 2015, have all held back major price gains. The silver lining is that low inventory has stopped the slide, and will bring modest appreciation. So, as long as inventory remains low, prices at Pelican Pointe will likely increase 2-3% annually, in line with the CPI (Consumer Price Index) historical average. Accordingly, it becomes a question of your timeline --- how long do you wait? At an anticipated 2-3% annual appreciation rate, there seems to be little reason to wait on the sidelines any longer. This is as opportune a time to sell or buy as we are likely to see for many years. 
