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Tag: Anna Maria Island real estate market

Real estate market in uncharted territory

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

Everyone likes to speculate on what the real estate trends will be going forward. The problem is we are in uncharted territory, so making predictions could be a fool’s errand.

What is it that we do know? We know we have lived through a devastating hurricane season, leaving homes all over Manatee County damaged. Anna Maria Island and other coastal communities bear the brunt of the damage but homeowners fronting the Manatee River have experienced their fair share of damage.

We also know the mortgage interest rates; the Federal Reserve lowering its rates in December did nothing to improve mortgage interest rates, just the opposite – they went up. On Jan. 17, mortgage rates rose above 7% for the average of a 30-year fixed rate mortgage for the first time since mid-2024 per Freddie Mac.

This uptick in rates was totally missed by housing executives and economists who incorrectly predicted that mortgage rates would come down. Six months ago, the prediction was that interest rates would be reduced slowly through 2025, and mortgage rates would reach the mid- to high-5% range. For our region, the combination of damaged properties and high interest rates that may also make investors take pause leaves us with a double whammy of uncertainty.

So, what’s the good news? I guess it depends on how you look at it, however, the Florida Demographic Estimating Conference predicts that Florida’s population growth will slow down. In 2024, the conference reported over 23 million in population, an increase of 1.62%. Their estimated growth rate for 2025 decreases to 1.43% and in 2026 down further to 1.33% and keeps declining. Nowhere in their estimates does it show that growth will be reversed; in fact, in 2033, Florida will likely reach well over 25 million residents.

As far as Manatee County’s position in this growth, in 2024 the population increased to just over 452,000 residents and by 2028 will potentially reach almost 485,000 residents. Looks like the slowdown won’t be an issue in Manatee County – not surprising based on the avalanche of new construction all over the county.

Let’s take a look at the December real estate statistics reported by the Realtor Association of Sarasota and Manatee:

Single-family homes in Manatee County closed 6.2% more properties this December compared to last December. The median sale price was $492,045, down 1.6%, and the average sale price was $675,263, down 2.8%. The median time to contract was 56 days compared to 35 days last year and the number of new listings was up 19.3%. The month’s supply of available properties was 4 months compared to 3.3 months last December.

Condos in Manatee County closed 24.9% more properties this December compared to last year. The median sale price was $327,000, down 6.6%, and the average sale price was $361,827, down 4.3%. The median time to contract was 56 days compared to 38 days last year and the number of new listings was up 43.5%. The month’s supply of available properties was 6.9 months compared to 4.6 months last year.

More next week about what these numbers may mean and the overall yearly trends.

Uncharted territory is probably an understatement since it’s almost impossible to get a firm answer about the future other than an overall feeling that everything will come back. As always, everyone needs to make decisions based on their personal needs, uncharted or not.

Housing market the only thing frozen in August

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

If you’re one of the lucky homeowners who was able to lock into dirt-cheap mortgage rates, well done. You’re one of the winners in today’s peculiar and lopsided housing markets.

This isn’t the first time we’re talking about it and will not be the last. Nevertheless, high interest rates have had an unexpected impact on the country’s housing market. Usually, when mortgage interest goes up, home prices go down. Not this time. Home prices keep pushing up because of the lack of inventory to choose from.

It’s almost getting monotonous to keep saying it, but the fact is there was a “lock-in” effect of ultracheap mortgages secured when interest rates were low, which trapped owners in their homes. It was an unforeseen consequence of years of easy money. Are you listening, Federal Reserve?

Two-thirds of outstanding mortgages in this country have a rate of below 4%, according to Morgan Stanley. The current typical rate is 7%, so homeowners who may want to move will be paying a lot more in their monthly mortgage payments today. Hence, frozen.

The byproduct of lower home sales is the economic consequence related to purchasing a home. People normally splurge to fix up houses before putting them on the market or renovate them after they move in. This important economic category of work has dried up not only for home contractors but also for professionals handling the logistics of transactions like attorneys, appraisers and real estate and mortgage brokers.

The only light on the horizon is the Federal Reserve, which left the door open to lower rates at their September meeting. Also, they have penciled in four rate cuts by year-end 2025 with the prediction being that rates could fall to 4.1% in a year.

Builders in some parts of the country are building smaller, more affordable new homes to attract buyers looking for a lower price point. As an aside, the U.S. house size exploded by 150% between 1980 and 2018, according to Census Bureau data. In 2022, the median house size hit 2,300 square feet. Everybody likes space but maybe it’s time to reduce the footprint of homes. Do kids really need their own bedroom and playroom?

So that news is good, but what about people who really need to sell and move on? Young people on a career path need to consider where they will live and how much that will cost before interviewing for a higher position that involves relocating. Seniors who want to downsize or move closer to family are also reluctant to sell. Even if they can tap into their existing equity, the assumption is their living expenses will be high wherever they go.

As more owners stay put, the number of homes on the market has fallen. Tight supply is pushing prices higher, shrinking the pool of buyers who can afford a home and leaving buyers who can afford one thinking they are overpaying. The National Association of Realtors reports there is around a five-month supply of inventory available. This availability number should be about 62% for a healthy market. The availability for single-family homes in Manatee County as of the June sales statistic is four months.

Even if you’re feeling lucky with your financing decisions, no one wants to be in a position where they feel frozen in place. You never know what curve life will throw at you, so being frozen isn’t good for anyone.