Real Estate Market Update

article by BILL CHAVIS, REALTOR

East Hill has been a desirable place to live since its renaissance in the mid to late 80’s. A favorite pastime of neighbors is to watch market activity and its ups and downs. The ups have been much more prevalent than the downs.

If you bought long ago, you have enjoyed living in East Hill and have made money/equity in the process. For the last year, buyers have been doing almost anything to win bidding wars and secure a home in East Hill. There were many different tools used to achieve results—offering far over asking price, including waiving appraisals, utilizing escalation clauses, paying seller’s fees, and simply paying cash.

Sellers, if they have someplace to go, are making more money than has ever been made in East Hill. Coincidentally, in May 2004 I sold a home that topped $100 per square foot, which was thrilling. Today, the average is $300 per square foot. For top-quality homes, some new builds have even sold for upwards of $340 per square foot.

As anyone who has either tried to purchase or rented a home in East Hill knows, the inventory is almost nonexistent. That further exacerbates the price increases. Lenders are coming out with new products like the “CASH2KEYS” program, which helps buyers who are getting loans stand out as if they were cash buyers, while also allowing them time to sell the home they are leaving.

A lot of sellers or potential sellers are faced with the major issue of finding a new home to move to –they have no problem selling their home but great difficulty finding a home to buy. This has prevented many people from selling. Needless to say, there is more to selling a home than meets the eye.

Many people think “The real estate market is so good that you don’t need a realtor to sell your home!” From 2021 until about March of last year, that was probably true. The question was not whether you could sell your home but whether you could net the maximum profit and avoid leaving money on the table. Experience as a realtor tells me that having many prospective buyers vying for a very limited inventory will always lead to higher sales prices than an isolated seller dealing with one buyer.

Though East Hill has always been well known for its desirability, recently the rest of Pensacola has been discovered and blossomed from the sleepy little town that I grew up in. The pandemic unleashed buyers from all over the country who are now free to choose where they live while remotely working. I predict that as long as they are able to keep selling their present homes in much higher valued areas, they will continue to bring their equity to Pensacola, and many will have the ability to easily beat out a Pensacolian working on a local wage that has either no equity or much less than the deep-pocketed outsiders.

The recent doubling of interest rates has caused a sudden change in activity that will even affect those East Hill homes that are not totally rehabilitated to move-in, upgraded quality. I believe now more than ever that with the current cost of homes, buyers and sellers need to rely on experienced, quality realtors who can protect them and at the same time, increase the opportunity to be satisfied for years to come.