Florida Real Estate News
This area of my website is dedicated to current economic news important to the real estate market as well as my continuing observation of the market conditions. Some articles have been taken from various real estate news sources.
The Current State of The Residential Real Estate Market
The figures for Ft Myers to Naples indicate sales are equal to or better than at the height of 2005. Buyers have taken advantage of extremely low prices, many below pricing from 2003-2004, on single family and condo properties.
The following was taken from recent articles providing updated information for the current real estate market:
Wells Fargo: Fla. economy to grow slowly, but still outperform national average
NEW YORK – Oct. 11, 2011 – Wells Fargo released its Economic Outlook for Florida yesterday, and the news was positive, though not by much. The company says the state is recovering more quickly that the nation in general, but part of the reason is that the state fell so far during the crash.
Still, the recession officially ended in 2009 and Wells Fargo economist Mark Vitner say the chance of a second recession is relatively low. However, he also thinks the recovery will be anything but robust, calling it “incredibly sluggish.”
For a housing recovery, jobs are key, and the report foresees a total of 40,000 new jobs added by the end of this year and an additional 64,000 in 2012.
Vitner says Florida’s recovery seems to have some legs as it expands beyond the tourism and health areas. The report points to an upswing of jobs, albeit small, in retail and trade, as well as professional and business jobs.
Wells Fargo report predictions
• Foreclosures will continue to impact home prices.
• The number of foreign investors could decline. European money problems have dampened demand from across the Atlantic, while a weaker Canadian dollar has impacted the value to Canadians. The flow of investors from the Americas has also declined.
• People will continue to move to Florida, though at a still-subdued pace: an expected 110,000 in 2011 and predicted 130,000 in 2012.
• The Florida economy will continue to grow. Wells Fargo predicts 2 percent in 2011 and 2.2 percent in 2012.
• Floridians’ personal income will also grow: 4.2 percent in 2011 and 4.3 percent in 2012.
• Home construction, while improving, won’t hit its full stride again – 1.2 million new homes – until 2015.
The full Wells Fargo report is available online.
Source: St. Petersburg Times, Jeff Harrington
© 2011 Florida Realtors®
NAPLES — Buyers are showing more interest in multimillion-dollar mansions in Naples.
From April to June of this year, sales for homes and condos priced at $2 million and up increased 20 percent, when compared to the same months a year ago. There were 91 sales, up from 76 a year ago in this market, according to report by the Naples Area Board of Realtors (NABOR).
The report is based on sales made through the association’s multiple listing service, or MLS, in Collier County, excluding Marco Island.
At a news conference on Friday, Coco Waldenmayer, managing broker for Engel & Völkers in Naples, described the jump in sales of luxury homes as “phenomenal.” “People are valuing our real estate, at least where it should be valued,” she said.
Further showing the trend, pending sales – or sales contracts – in the $2 million-and-up price range increased 17 percent in the year ending June 30, 2011, compared to the same 12 months a year ago. There were 280 contracts written, up from 239.
In the second quarter, median sales prices for multimillion-dollar homes in the Naples market rose 8 percent, reflecting higher demand. The median is the price at which half the homes sell for more and half for less.
“People I think are convinced that we have hit the bottom,” said Wes Kunkle, the founder and broker of Kunkle Realty in Naples.
At Premier Sotheby’s International Realty in Naples, the increased demand for luxury homes has helped generate record sales this year. The company reported more than $1 billion in sales in the first half of this year in Collier, Lee, Charlotte, Sarasota and Manatee counties. The company’s average sales price year-to-date is $1.1 million.
More wealthy buyers are deciding to “make that plunge” because they have more confidence in the economy, said Judy Green, CEO and president of Premier Sotheby’s.
“They’ve always been there. They’ve always had the money, but they held on to it – as we all have – because of certain challenges the economy has faced,” she said.
Like all buyers, the wealthy are looking to take advantage of the price drops that followed a market crash.
Premier’s new affiliation with Sotheby’s has also helped the company attract more wealthy buyers this year, including international ones, Green said.
“Since January, 31 percent of all the international sales were in the state of Florida,” she said. “Certainly, here in the Naples market, we get our fair share.”
Her company is a leader of sales in such posh neighborhoods as Port Royal, Aqualane Shores, Old Naples and Park Shore.
Most of the higher-end sales are being made to seasonal buyers, who will use them as vacation homes.
Though luxury home sales are picking up, the under $300,000 market is still the most active in the Naples area, reflecting a surge in foreclosure and short sales that followed a housing bust. At one time, these distressed sales made up 50 percent of the market. In June, they dropped to 32 percent of all sales, said Brenda Fioretti, NABOR’s president and a managing broker of Prudential Florida Realty in Naples.
As the inventory of higher-end homes shrinks, Fioretti said she expects there to be more tear downs of older homes to make way for new mansions in Naples, especially along the waterfront.
The inventory of homes and condos in the $2 million-plus market dropped to 419 in the second quarter of this year, down from 537 a year ago.
From April to June, there were a total of 2,576 home and condo sales made in the Naples area market, up slightly from 2,562 in the same quarter a year ago. Overall, the median price rose 1 percent to $197,000.
Of the total sales made in the second quarter, 1,691 were for less than $300,000, making up nearly half of all sales. There were another 383 sales in the $300,000 to $500,000 market; 273 in the $500,000 to $1 million market, and another 138 in the $1 million to $2 million market.
In June, there were a total of 751 sales made in the Naples area market, down 4 percent from 783 in the same month a year ago. Fioretti attributed the drop, in part, to the end of a federal homebuyer tax credit that expired on June 30 of last year.
John Steinwand, president of Naples Realty Services, said, “The housing trends are easy to see. The inventories are going down. The demand is steady and prices are nudging up.”
There are 7,208 homes and condos on the market, representing about a nine-month supply, according to NABOR. A year ago, there were 8,845 properties for sale.
In 2008, there was a more than three-year supply of homes and condos on the market. With inventories continuing to shrink, “We can look for new homebuilding to pick up speed,” Steinwand said.
Overall, pending sales rose 3 percent in the second quarter, compared to a year ago. That’s a good sign for the future, said Kathy Zorn, a co-owner and broker for Florida Home Realty in Collier County.
“The market seems to be correcting itself, slowly and deliberately,” she said.
Connect with Laura Layden at www.naplesnews.com/staff/laura_layden.
U.S. Homes: Now the Best Deal in Recorded History
By Dr. Steve Sjuggerud
Reprinted June 1, 2011
Now is literally the best time in recorded history to buy a house in America…
Right now – today – U.S. real estate is the most affordable it's ever been. Ever.
When I say "affordable," I'm looking at three things: house prices, mortgage rates, and incomes.
With the Affordability Index near 200, the median family has 200% of the income necessary to buy the median home (or more specifically, to qualify for a conventional loan on the median home).
It's easy to see where we are now…
Right now, as you know, house prices are sitting near new lows for this cycle, down by roughly one-third (depending on who's counting). And right now, mortgage rates – after ticking above 5% earlier this year – are all the way down to 4.5% again, near all-time lows.
So it's simple: With the worst house-price crash in American history, combined with the lowest mortgage rates in history, you can now afford more home than ever.
Meanwhile, hope is gone. Everyone thinks housing is hopeless. That is when a bear market ends and a new bull market begins.
At a conference I attended last month, some speakers spoke woefully of the large supply of houses for sale. That will take care of itself in time. Others bemoaned the certainty of higher interest rates in the future, which would hurt housing. But they shouldn't be so certain…
Twenty years ago, Japan faced a housing bust similar to ours. Japan's government has cut interest rates to near zero and printed money. And long-term interest rates in Japan currently sit around 1%.
Even rising interest rates won't kill housing… In the 1970s, interest rates were rising, and house prices outperformed stock prices.
The story is simple: House prices have fallen more than ever… And mortgage rates are lower than ever. If you can buy a house now (and want one), go for it.
Now is the best time in American history to do it.
Reprinted from www.dailywealth.com investment newsletter Wednesday June 1, 2011.
About the author...
Dr. Steve Sjuggerud is the founder and editor of one of the largest financial newsletters in the world, True Wealth which he began writing in 2001. Steve's investment philosophy is simple: "You buy something of extraordinary value at a time when nobody else wants it. And you sell it at a time when people are willing to pay any price to get it."
Housing affordability rises to record level
WASHINGTON – May 25, 2011 – Nationwide housing affordability during the first quarter of 2011 rose to its highest level in the more than 20 years it has been measured, according to National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) data released today.
The HOI indicated that 74.6 percent of all new and existing homes sold in the first quarter of 2011 were affordable to families earning the national median income of $64,400. This eclipsed the previous high of 73.9 percent set during the fourth quarter of 2010 and marked the ninth consecutive quarter that the index has been above 70 percent. Until 2009, the HOI rarely topped 65 percent and never reached 70 percent.
“With interest rates remaining at historically low levels, today’s report indicates that homeownership is within reach of more households than it has been for more than two decades,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “While this is good news for consumers, homebuyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales.”
Syracuse, N.Y., was the most affordable major housing market in the country during the first quarter of the year. In Syracuse, 94.5 percent of all homes sold were affordable to households earning the area’s median family income of $64,300.
Also ranking near the top of the most affordable major metro housing markets were Youngstown-Warren-Boardman, Ohio-Pa.; Indianapolis-Carmel, Ind.; Warren-Troy-Farmington Hills, Mich.; and Toledo, Ohio.
Among smaller housing markets, the most affordable was Kokomo, Ind., where 98.6 percent of homes sold during the first quarter of 2011 were affordable to families earning a median income of $61,400. Other smaller housing markets near the top of the index included Monroe, Mich.; Cumberland, Md.-W.Va.; Elkhart-Goshen, Ind.; and Springfield, Ohio.
New York-White Plains-Wayne, N.Y.-N.J., led the nation as the least affordable major housing market during the first quarter of 2011. In New York, 24.1 percent of all homes sold during the quarter were affordable to those earning the area’s median income of $65,600. This marks the 12th consecutive quarter that the New York metropolitan division has held this position.
Other major metro areas near the bottom of the affordability index included San Francisco-San Mateo-Redwood City, Calif.; Los Angeles-Long Beach-Glendale, Calif.; Honolulu; and Santa Ana-Anaheim-Irvine, Calif., respectively.
San Luis Obispo-Paso Robles, Calif., where 47.6 percent of the homes were affordable to families earning the median income of $72,500, was the least affordable of the smaller metro housing markets in the country during the first quarter. Other small metro areas ranking near the bottom included Santa Cruz-Watsonville, Calif.; Laredo, Texas; Ocean City, N.J; and Santa Barbara-Santa Maria-Goleta, Calif.
© 2011 Florida Realtors®
WASHINGTON (AP) – May 24, 2011 – More Americans bought new homes for a second straight month in April, a hopeful sign. Still, sales remain far below the pace that would represent a healthy housing market.
New-home sales rose 7.3 percent last month to a seasonally adjusted annual rate of 323,000 homes, the Commerce Department said Tuesday. A normal housing market would mean a pace of about 700,000 new-home sales a month.
People have little incentive to buy new homes, in part because they’re comparatively expensive. The median price of a new home rose more than 2 percent from March to $217,900. New-home prices are more than 30 percent higher the median price of re-sales – twice the normal markup.
Last year, Americans bought the fewest number of homes on records going back 47 years.
Fewer new homes mean fewer jobs. Each new home creates an average of three jobs for a year and generates $90,000 in taxes, according to the National Association of Home Builders.
Many builders have been waiting for the glut of foreclosures and other distressed properties to be cleared before stepping up construction. But with a record 1.2 million foreclosures forecast this year, a recovery isn’t expected for years.
Copyright © 2011 The Associated Press, Derek Kravitz, AP real estate writer.
London Bay Homes recently invited real estate analyst Michael Timmerman of Fishkind & Associates to brief the REALTOR® community on the state of the Florida housing economy, with a specific focus on Lee and Collier Counties.
Summarizing Michael's presentation, he sees the Florida economy and employment pictures improving in 2011 with continued momentum through 2014. He projects that housing starts will grow from about 45,000 statewide in 2011, to more than 100,000 by 2014. Pricing is expected to improve gradually during this period as inventory continues to decline. The current pace of foreclosure activities is nearly two-thirds below the rate in early 2009, when filings peaked at about 3,000 per month in Lee and 1,000 per month in Collier.
The lower rate reflects greater stability in the market and bodes well for pricing in the years ahead. Resale pricing has been relatively flat since early 2009, settling in at slightly below $100,000 in Lee County and slightly above $200,000 in Collier. Michael also sees some challenges in the condo market, primarily because of difficulty in obtaining financing and buyers’ concern about HOA fee structures. Lastly, he cites the luxury master planned community market as one that is likely to recover more quickly than other segments of the market, since these communities tend to retain their value better than the lower price points.
Florida attracts 2.8 million over decade
WASHINGTON – March 21, 2011 – New Census data show that Florida has registered its seventh consecutive decade of double-digit population growth. While the nation as a whole grew by 9.7 percent, the number of Sunshine State residents surged 17.6 percent as 2.8 million more people put down stakes here from between 2000 and 2010.
Demographers noted that Florida’s minority populations increased as well, with the number of Hispanics and African Americans swelling by 57.4 percent and 15.2 percent, respectively.
“When we look at how Florida grew, it was driven primarily by migration, particularly by domestic migration from other parts of the United States,” explained Kenneth Johnson, a senior demographer with the Carsey Institute. “That was an important force, although it did slow down at the end of the decade.”
The state’s population gains also materialized despite a high rate of unemployment coupled with a housing slump. The Census statistics reveal that almost 1.7 million new residential units were constructed over the past decade, for a total of 8.9 million; however, the number of vacant properties catapulted nearly 63 percent over the same time frame to 1.5 million from 603,760.
Source: New York Times (03/16/11) P. A20; Van Natta Jr., Don
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Gen X buyers to lead housing recovery
WASHINGTON – March 18, 2011 – Generation X — adults ages 31 to 45 — are expected to lead the recovery in the housing market, according to real estate experts in a recent webinar produced by the National Association of Home Builders. During the event, speakers highlighted results of a survey of 10,000 buyers in 27 metro areas.
While Generation X isn’t the largest population group — making up 32 percent of the population compared to 41 percent of baby boomers — it’s the most mobile age group, says Mollie Carmichael, principal of John Burns Real Estate Consulting in Irvine, Calif., the company that conducted the survey.
“They are in full force with their careers, and they need to accommodate growing families,” Carmichael says.
This generation is coming with their own set of house preferences that may differ from other generations. Even though home sizes continue to shrink, first-time buyers and younger families are looking for more room to grow, Carmichael says. Nearly 50 percent said they prefer a home with a large lot and in a suburban development. Only 21 percent said they are looking for a traditional or “walkable neighborhood,” according to the survey.
“They want something compelling, from a design or personalization standpoint,” Carmichael says.
And many want “green,” energy-efficient features, too. Regardless of age group, 70 percent of buyers said in the survey they are willing to pay $5,000 more for a home with “green” features.
Most buyers also said they’d be willing to pay a premium for such housing characteristics as dark wood cabinets, a separate tub and shower, and a fireplace in the living room.
Source: “Young Home Buyers Will Lead Housing Market Recovery, Says NAHB,” National Association of Home Builders (March 17, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688