Florida’s Housing Market: Sales, Median Prices Up in May 2017

Florida’s housing market reported more closed sales, higher median prices, more new listings and more pending sales in May, according to the latest housing data released by Florida Realtors. Sales of single-family homes statewide totaled 27,850 last month, up 7.6 percent compared to May 2016.

Buyer demand continues to fuel Florida’s housing market this month. As for-sale inventory continues to be tight, prospective buyers are responding by being prepared, pre-qualified and ready to make an offer when they find the right home. Realtors across the state report that many newly listed homes are selling quickly. In May, sellers of existing single-family homes received 96.4 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 94.7 percent – a signal that the listed price is extremely close to market value.

The statewide median sales price for single-family existing homes last month was $239,000, up 7.7 percent from the previous year, according to data from Florida Realtors research department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in May was $178,000, up 8.1 percent over the year-ago figure. May was the 66th consecutive month that statewide median prices for both sectors rose year-over-year. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in April 2017 was $246,100, up 6.1 percent from the previous year; the national median existing condo price was $234,600. In California, the statewide median sales price for single-family existing homes in April was $536,750; in Massachusetts, it was $362,500; in Maryland, it was $285,023; and in New York, it was $235,000.

Looking at Florida’s townhouse-condo market, statewide closed sales totaled 11,538 last month, up 8 percent compared to May 2016. Closed sales data reflected fewer short sales and last month: Short sales for townhouse-condo properties declined 44.8 percent while short sales for single-family homes dropped 30.8 percent. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

Inventory remained tight in May with a 4-months’ supply for single-family homes and a 6-months’ supply for townhouse-condo properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.01 percent in May 2017; it averaged 3.60 percent during the same month a year earlier.

To learn more about the current real estate market in Florida, contact a member of the 9 Core Realty team!

Population Growth and Affordable Cost of Living Accelerate CRE Renaissance in the Southeast

With rapid growth across markets in the Southeast, the region has emerged as a diverse, economic powerhouse, resulting in strong commercial real estate fundamentals for all property types. The Southeast’s rosy story is the result of a shift in both population and business growth from the Northeast and Midwest Rustbelt to Southeast markets, a reflection of the region’s desirability.

Collectively, the six states comprising the region—Alabama, Florida, Georgia, North Carolina, South Carolina and Tennessee—would form the sixth largest country in the world from a GDP standpoint. Over the last three to four years the Southeast has experienced the greatest population growth in the United States. The Atlanta population increased by 1.6 percent, Miami’s by 1.5 percent and the population of Raleigh, N.C. by 2.5 percent, compared to 0.5 percent population growth in Los Angeles and Boston during the same period, 0.25 percent in New York City and Philadelphia and negative population growth in Chicago.

Tampa, Fla.

Located on Florida’s Gulf Coast, the Tampa-St. Peterburg market, which includes Hernando, Hillsborough, Pasco and Pinellas counties, is home to Port Tampa Bay, which has helped to define the region as a logistics hub. It is Southwest Florida’s economic anchor, with active defense and security industries and a strong financial services sector. In fact, Tampa is home to 10 percent of the nation’s Fortune 50 shared-services operations.

Moody’s predicts that growth in the Tampa market will keep pace with the rest of nation, as the area reaches full employment. An average 2.1 percent annual growth in employment is already putting upward pressure on wages and resulting in economic acceleration.

The region’s biggest challenge in attracting business is the lack of a modern mass transportation system. The Tampa Bay Express, a program aimed at modernizing Tampa’s infrastructure and building a comprehensive regional transportation system, along with establishment of cross-bay ferry services, should help the market overcome this deficiency.

Demand for commercial properties here has accelerated in recent years, with sales volume reaching nearly $6.3 billion in 2015, but then slowing in 2016. While investors remain cautious, Tampa is a growing market with competitively priced assets and high-yield opportunities, noted a recent CBRE report.

To learn more about the Florida real estate market contact an expert member of the 9 Core Realty team.

 

Lee County Property Values Rise 6 percent

Taxable property values in Lee County increased by more than 6 percent last year, according to figures recently release by the Lee County Property Appraiser.

But the total value of property in the county is still about $10 billion behind what real estate was worth a decade ago, right before the Great Recession.

Fort Myers had the highest percentage increase of the municipalities with almost 8.1 percent, closely followed by Cape Coral’s 7.9 percent. San Carlos Fire District’s 9.4 percent was the largest increase of districts that use property taxes to raise money.

The figures are the first look that local officials get at how much property values increased. The increased valuation means more money can be raised by keeping taxes at the same rate or even lowering the rate to receive the same amount of money next year.

The total value of property in Lee County as of Jan 1 was $103 billion. After exemptions and other allowances, the total taxable value is $72.3 billion.

Bonita Springs

With a taxable value increase of 5.93 percent, Bonita Springs taxable value increased $544 million to $9.72 billion.

New housing developments east of Interstate 75 along Bonita Beach Road and other projects account for $214 million of the increase, compared to an increase of $339 million to Bonita’s taxable value in the 2016 tax year.

Cape Coral

Growth is picking up in Cape Coral. Florida’s 10th largest city added almost a billion dollars in taxable property over the last year.

At 7.87 percent growth, the city went from $12 billion to just shy of $13 billion in taxable property values. Fueling that growth, in part, was $277.5 million in new construction. That’s $80 million more in construction than in 2015.

Estero

Estero had the lowest percentage increase of any municipality in the county at 4.64 percent.

Even so, the preliminary reports shows the village with a $283 million increase from 2016, bumping the total taxable property in the village to $6.38 billion.

New construction of homes and businesses account for more than half of the increase.

New development, the village’s location and the continued increase of people flowing into Southwest Florida all play a part in increasing property values.

Fort Myers Beach

Total taxable value at Fort Myers Beach increased 4.84 percent, to $3.2 billion, an increase of about $150 million compared to the previous year.

Fort Myers

Property values increased for the fifth straight year in Fort Myers. By percentage, the Fort Myers tax base grew more than any other municipality in the county

Estimated taxable property values increased by 8.1 percent. That translates to $443.5 million in increased taxable property values. A big factor was $237.8 million in new construction. All told, city taxable values  have jumped from about $5.5 billion to $5.9 billion in taxable value.

Sanibel

The city of Sanibel, which has the lowest property tax base in the county, had values increase by 5.87 percent.

Total taxable property values in the city is just over $5 billion, a 5.87 percent over last year.

To learn more about property values throughout SWFL contact a member of the 9 Core Realty team!

Why are some markets missing the inventory misery?

At the end of the first quarter, inventories fell to their lowest levels since the beginning of the recovery and fell to a 3.8 months’ supply by the end of March.

By April, tight supplies reached a point where they started crippling sales, which fell 2.4 percent. On a national basis, the total supply improved slightly in April, but the national inventory is still 9 percent below last year’s level, which was below the year before.

We are now in the third year of an inventory drought that echoes conditions at the peak of the boom 10 years ago.

National numbers are only aggregations of hundreds of markets, and they may be masking what’s going on at the ground level where people buy and sell homes.

One out of 10 of the nation’s 100 largest markets had larger numbers of active listings at the end of March than they did 12 months earlier. Some of them aren’t doing as well as they normally do, and are barely in the black. Two are flush with properties.

Why are some markets missing the misery and others are not? What can these fortunate metros tell us about how to cure the drought that has left the housing recovery dry and barren? Do they hold the key — or even clues — to a national inventory recovery?

Drawing on Q1 inventory data from realtor.com, which carries about 1.4 million active listings, 12 of the nation’s 100 largest markets report an annual increase in listings.

The multiple listing services for two markets, Denver and Pittsburgh, reported that their positive investor counts had turned negative in April, so they were eliminated from the list.

A cursory look at the list rings some bells. Palm Bay, Florida; Las Vegas; Cape Coral, Florida and Fresno, California; were all epicenters of the foreclosures that shook real estate markets following the housing bust in 2007.

Thousands of homes became rentals and diminished the stock of ownership properties. The inventory of single-family rental houses grew dramatically to 12 percent of all housing units in 2015, up from 9 percent in 2006. The vast majority of these are owned by small investors with fewer than 10 rental properties.

The Texas cities of Dallas, Houston, Austin and McAllen along with Tulsa, Oklahoma, are in a similar situation. They are centers of the oil industry boom (created by new technology like fracking) that took off in 2011. The boom created a large demand for housing.

 

Austin’s housing shortage was also generated by a boom in its technology industry. With the decline in oil prices, employment had fallen and housing demand had diminished temporarily, which helped inventories recover.

Sales are down 8.53 percent in Tulsa, and the decline in home values hit the housing market hard in McAllen. Today, McAllen ranks third in the national growth of underwater mortgages, up by 7,746 homes in the last quarter.

However, in addition to layoffs, positive inventories in Texas and Oklahoma owe more to another force: new construction.

The housing recession devastated homebuilders, and it has taken years for them to restock their supply of land and labor. The oil boom gave Texas builders a three-year head start in advance of the national housing recovery.

With fewer regulatory constraints than most other states and more time to ramp up production, Texas now leads the nation in permits issued and housing starts, which in April were up 26.7 percent quarter-over-quarter, the strongest showing in more than a decade.

Quarterly starts were up 4.6 percent in Dallas, 5.3 percent in Houston, and 5.8 percent in San Antonio. April new home sales in Austin, Dallas-Ft. Worth, Houston and San Antonio rose more than 17 percent over 2016.

MLSs serving markets like Dallas and Houston may also carry more new home listings in their inventories than other MLSs because of the success of HomesUSA, a platform for real estate agents to publish and manage builder inventory on the MLS.

To learn more about current real estate trends in Cape Coral, FL contact a member of the 9 Core Realty team!

Florida’s Housing Market: Sales, Median Prices Up in First Quarter of 2017

Florida’s housing market reported more closed sales, higher median prices and more pending sales during the first quarter of 2017, according to the latest housing data released by Florida Realtors. Closed sales of single-family homes statewide totaled 60,733 in 1Q 2017, up 5.1 percent over the 1Q 2016 figure.

During the first three months of 2017, traditional sales of single-family homes and condo-townhouses rose in Florida. In another positive sign, pending sales for single-family homes rose 1.8 percent year-over-year, while condo-townhouse pending sales rose 4.8 percent. Distressed property sales continued to drop – which underscores solid stability in the state’s housing market.

Buyer demand continues to increase, yet the inventory of homes for sale remains tight in many local markets. That’s putting upward pressure on median prices and sometimes results in multiple offers. By working closely with a Realtor who knows local market conditions and trends, consumers have an expert in their corner whether selling or looking to find their dream home.

The statewide median sales price for single-family existing homes in 1Q 2017 was $226,000, up 10.7 percent from the same time a year ago, according to data from Florida Realtors Research department in partnership with local Realtor boards/associations. The statewide median price for condo-townhouse properties during the quarter was $167,000, up 9.2 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Looking at Florida’s condo-townhouse market, statewide closed sales totaled 26,351 during 1Q 2017, up 7.6 percent compared to 1Q 2016. The closed sales data reflected fewer short sales – and rising traditional sales – over the three-month period: Short sales for condo-townhouse properties declined 38.8 percent while short sales for single-family homes dropped 36.3 percent. Meanwhile, traditional sales for condo-townhouse units rose 16 percent and traditional sales for single-family homes increased 15.1 percent year-over-year. Closed sales typically occur 30 to 90 days after sales contracts are written.

A shortage of both new and existing homes for sale throughout much of the state continues to drive the Florida housing market narrative in 2017. New listings of existing single-family homes in the first quarter were only up one percent relative to the same quarter last year, while the number of closed sales increased by over five percent, thanks in large part to a record-breaking March.

Homes are also selling faster this year. Half of the single-family homes which sold so far in 2017 went under contract in 50 days or less, which is nearly a 6 percent drop from the 53-day figure reported at this point last year. Based on these figures, it’s not altogether surprising that the current supply of single-family homes for resale is down by about 5 percent, year-over-year. The rate of new construction in Florida, meanwhile, is increasing but is still well below its historical norms, so relief is not on the immediate horizon.

In 1Q 2017, the median time to a contract (the midpoint of the number of days it took for a property to receive a sales contract during that time) was 50 days for single-family homes and 55 days for condo-townhouse properties.

Inventory was at a 4.1-months’ supply in the first quarter for single-family homes and at a 6.3-months’ supply for condo-townhouse properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.17 percent for 1Q 2017, significantly higher than the 3.74 percent average recorded during the same quarter a year earlier.

To learn more about the current state of the Florida real estate market, contact an expert member of the 9 Core Realty team.

 

 

More New Norms for US Real Estate Market

A macro look at the U.S. and global economies indicates the US real estate markets are remaining stable and should do the same for at least six months to two years. Or until an unforeseen major economic event occurs. It can be a challenge just keeping track of emerging changes in a single market such as real estate. Still, it’s good to periodically look at the whole picture to see how it is likely to affect individual investment decisions.

Stable and normal doesn’t mean it’s good for everyone or every geographical location. But it does show some predictability. Top tier markets such as Manhattan and San Francisco have reached a pinnacle causing a slowing in investment because of diminishing returns. This causes a shift of big money into smaller markets. Smaller investors will do well to seek out these tier 2 markets to follow the money.

Global economic and political uncertainty continues driving capital to the United States. Specifically into U.S. real estate. Higher relative yields, price appreciation potential, and transaction transparency make it the logical and easy investment choice. However, slowing growth in China and much of Europe could further dampened currencies and incomes there. Still, ample non-U.S. capital is seeking investment with a very strong demand for U.S. assets. The Association of Foreign Investors in Real Estate (AFIRE) expects China, Canada, Norway, and Singapore to ride the U.S. real estate investment wave.

Changes in the Foreign Investment in Real Property Tax Act (FIRPTA) now allows foreign investors to be treated in a fashion similar to their U.S. counterparts. This will likely lead to an increase in foreign investment in the U.S. real estate market as well.

The new normal includes slow new construction. Modest supply growth will occur in a few sectors. Primarily multifamily, student and senior housing, and single-tenant industrial (regional distribution centers). Other growth will come from repurposing out dated and vacant structures such as suburban malls. Lending sources will remain extremely skeptical about funding new construction – particularly hotel and hospitality.

To learn more about the current state of the US real estate market contact 9 Core Realty today!

Life is good for U.S. home sellers

It’s good to be a home seller right now … really good. That’s because it’s the most profitable time to sell a home in almost 10 years. Homeowners who sold in the first three months of this year saw an average price gain of $44,000 from purchase, according to a recent report from Attom Data Solutions. That’s the highest gain since 2007.

Cities with robust local economies have seen strong price growth during the housing market’s recovery. Low housing supply has helped push up prices to create competitive markets where bidding wars and above-asking price sales are common.

Nationwide, the median home price was $225,000 during the first quarter of 2017, the report stated, up 13% from a year ago.

Homes in more expensive markets have seen the highest average price gains so far this year, the report found. Sellers in San Jose, California, saw an average price gain of $356,500, followed by those in San Francisco with a gain of $276,750.

Even in a seller’s market, homeowners aren’t necessarily in a hurry to list their homes. Sellers in the first quarter of this year had lived in their home for an average of almost eight years. From 2000-2007, the average homeownership tenure was around 4.26 years.

After the housing crisis, many homeowners were underwater and had to stay put until they could rebuild their equity. Now, tight inventory levels have made some owners hesitant to sell because they fear they won’t be able to find a home to move into.

Other homeowners are simply relishing the home price appreciation and expect it to keep going.

While strong price gains are good news for homeowners, it means buyers really have to step up their game in order to compete.

Not only are home prices rising, they’re moving fast. On a national level, homes sat on the market for an average of 45 days in the first quarter, down from 84 during the same time period in 2011, according to data from Clear Capital.

In the five fastest-moving markets, homes are on the market for less than 21 days.

But not all homeowners are swimming in equity and have buyers lining up around the block. While home prices have exceeded pre-recession levels in more than half of U.S. housing markets, 46% still haven’t returned to their peaks.

In Las Vegas, home prices are 26% below their pre-recession high and in Miami and Baltimore, they are 22% below.  To learn more about the current state of the real estate market in your area contact the 9 Core Realty Team.