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Tag: Anna Maria Island real estate

Big holiday, not so big housing market

Written by Louise Bolger on . Posted in Business, Castles in the Sand, Real estate | Development.

July Fourth is this week, so fire up the grill and hang up the flags, but go easy on the fireworks. You may not need real fireworks after reading the May sales statistics for Manatee County and the general housing imbalance around the country, but you need to hear about it.

According to Redfin, the U.S. housing market had nearly a half million more sellers than buyers in April. This is the biggest gap on record going back to 2013, comprised primarily of sellers who need to sell for lifestyle reasons or who may be investors who want to pull their money out before prices readjust downward.

Buyers finally have the upper hand in many markets that are turning into buyers’ markets. Concessions are being made and prices are being cut, but not enough to get buyers flooding back into the market. Nevertheless, home prices are still up more than 50% in the past five years and mortgage rates are not moving off an average of 6.5%. Add this to the general economic uncertainty and you’ve got buyers who are scared silly to make a decision. A friend forwarded to me some mortgage information from a SmartAsset study analyzing mortgage rates in Florida. Manatee County’s typical rate was 6.48%, Sarasota’ was 6.91% and Palm Beach 7% to name a few.

Much of the real estate markets are governed by local activity, however, one of the biggest buyers’ markets is the Southeast, where the inventory of homes for sale is above pre-pandemic levels. For Florida, the only positive news is that the Northeast and Midwest have more buyers than sellers, where historically so many of Florida’s buyers relocate from.

Like it or not, here are the May sales statistics published by the Realtor Association of Sarasota and Manatee.

Single family homes closed 1.9% fewer properties in May of this year compared to last year. The median sale price was $478,195, down 8.9%, and the average selling price was $638,855, down 9.9%. The median time to contract was 52 days compared to 45 last year and the new listings were down 6.6%. The available month’s supply of properties was 5.2 months compared to 4.1 months last year.

Condos closed 0.4% more properties this May compared to last year. The median sale price was $313,000, down 13.4%, and the average sale price was $345,549, down 16.2%. The median time to contract was 60 days compared to 56 days last year and new listings were up 12.9%. The month’s supply of available properties was 7.9 months compared to 6.3 months last year. A six-month supply of available properties is considered normal, therefore, 7.9 months is pretty far out of range.

I’m not sure what to say about this month’s report. Perhaps the Realtor Association of Sarasota and Manatee’s press release says it best: “Sarasota and Manatee County shows continued signs of a market in transition. Inventory remains significantly higher that this time last year, the pace of growth has begun to slow compared to previous months. Finally, buyers are gaining negotiating power, while sellers must adjust to a landscape that favors realistic pricing and patience.”

Enjoy the holiday however you choose to celebrate. Most of all be safe during this crazy holiday whether you’re in a car, at the beach or in a boat. Stay positive about the status of the world and our own little piece of it. Eventually, the real estate markets will level off to a more normal one and the world will hopefully settle down.

All real estate is local, especially now

Written by Louise Bolger on . Posted in Business, Castles in the Sand, Real estate | Development.

My favorite real estate expression is “all real estate is local,” which I have used in this space many times. But what exactly does that mean?

Essentially it means that real estate markets are significantly influenced by local factors and conditions, rather than national or global trends. Also, it means that property values, demand and investment potential can vary greatly even within the same city or across the street.

This is important to the value of property because growth, population trends, school districts, amenities and local regulations all impact property values and demand. Relying solely on national or global trends can lead to poor decisions because they don’t capture the nuances of local markets. Therefore, when you read the following national statistics recently appearing in the Wall Street Journal according to Intercontinental Exchange, a financial technology and data company, keep this in mind: The metro areas that had the biggest increase in home prices in April compared to a year ago are:  Bridgeport, Conn., Scranton, Pa., Hartford, Conn., Syracuse, N.Y. and New York, N.Y. These increased ranged from a high of 7.3% to 6.4%.

The biggest decreases were in Lakeland, Fla., Tampa, Fla., Austin, Texas, North Port, Fla. and Cape Coral, Fla. These declines ranged from a high of 7.5% to 2.2%.

The report also compares home prices vs. change in housing inventories. For example, New York’s prices increased 6.4% in April while inventory was down 46% from pre-pandemic levels. This trend continued through the Midwest down through Texas and Florida ending in Cape Coral, Fla with a decline in prices of 7.5% in a year.

Also influencing these numbers is the amount of southern migrating occurring from 2020 to 2024. During that time, the south’s population grew 5.1% with Florida and Texas benefiting the most. Florida’s population increased 8.5% and Texas’ population increased 7.4% during this period, per the Census Bureau.

In response to the increase in population, builders started building in areas of Florida in particular that were farming communities. There are now new home communities going up in west Bradenton and north of the Manatee River in Parrish, inflating the number of properties on the market in Manatee County.

Nationally, the supply of homes for sale is still around 16% below pre-pandemic levels, according to Realtor.com. which is not what Florida is experiencing. Homeowners who locked in low mortgage rates a few years ago are reluctant to sell their homes and take on new mortgages with a higher borrowing cost, and buyers are still waiting for lower interest rates.

The wrap-up on these numbers is that the Northeast and Midwest home prices continue to rise in all major markets. In the South, particularly in Texas and Florida, prices are flat or falling. And in the West, prices are rising in some markets and falling in others.

In addition, the overall U.S housing market is far less active than it was a few years ago when mortgage rates were low and remote work allowed people to move farther from their offices. Again, I would not bet money on any of this. I’m not saying it’s not true only that it can change in a heartbeat. As soon as the snowbirds from all over the country and Canada figure out that Florida’s prices are dropping, and new construction is readily available, they will come back in force looking for a bargain.

Everything in life is dictated by what’s happening in your state, county, and street. All real estate is local; you better believe it.

Condo ownership challenging

Written by Louise Bolger on . Posted in Business, Castles in the Sand, Real estate | Development.

If you like the condo lifestyle and you live in Florida, you’ve landed in the right place. But even what seems to be the right place can have challenges, especially in the environment we’re currently living in.

Let’s start with the rights of condo owners. Florida condo law, as outlined in the Florida Condominium Act (Chapter 718 of the Florida Statutes) will explain, in fine print, owner rights as an owner, but for the purpose of this column we’ll hit on some of the key aspects.

As a condo owner, you have exclusive ownership of your unit; remember, when you purchase a condo, you receive a deed just like if you purchase a single-family home. This includes the right to occupy, decorate, renovate, lease or sell your unit. Every condominium association has certain restrictions on these above rights which will be disclosed to a prospective buyer in both the association’s condo docu­ments as well as their rules and regulations. For instance, there could be limitations on types of modifications that can be made and may require board approval for renovations and/or modifications.

Owners have access to common elements such as pools, gyms, docks and clubhouses. Again, all of this is within association guidelines based on hours, noise restrictions and ongoing repair work.

Living in a condo association, you are automatically a member with a voice in the governance of the community. You will be asked to vote on material alterations, elec­tions for the Board of Directors and other significant community decisions. I can’t emphasize enough that becoming active in the community, volunteering on commit­tees and running for a board position is one of the most important things you can do if you want your voice heard.

Florida law ensures that condo owners have the right to inspect the association’s official records. Not all of the financial records can be disclosed in a board meet­ing, therefore, if you want more detailed information, you can ask the board for specific records you want to review.

Since no one is perfect, there may be times when you as an owner feel that rules are not being enforced equally or that there are excessive rules. This is also protected under Florida’s condo law and should be brought to the attention of the Board of Directors.

Certainly, the most important aspect of your rights as an owner is the stability of the association’s finances. This includes increases in fees, the addition of special assessments and a clear justification for fee increases, all of which can be contested by an owner.

One of the reasons to know what your rights are as a condo owner is coming to a head in several states but particularly in Florida. As a result of the Surfside disaster, Florida enacted specific inspec­tion laws relative to the stability of condo buildings that are three stories or higher. Condos need to be inspected by a Florida qualified inspector and if there are any structural repairs required, the association is mandated to make the repairs. In addition, in Florida, condo associations have to prove through their financial records and reserves that they have adequate funds to make any repairs needed.

Condo associations that haven’t prepared for this are facing large assessments and are also putting the ability of buyers to be approved for financing in jeopardy. Fred­die Mac is quietly blacklisting areas of the country or individual associations where mortgages will not be approved. This extends itself to the insurance industry, which could be another obstacle in the way of selling your condo.

A condo is still the most carefree lifestyle and perfectly suited to Florida living. You just need to stay on top of how the association is spending your money, stay involved and understand your rights.

The new real estate reality

Written by Louise Bolger on . Posted in Business, Castles in the Sand, Real estate | Development.

It’s been six months since Hurricane Milton invaded us and every day we still feel the effects of the storm. Most of us are either continually rebuilding, cleaning up or juggling finances to get our lives back to where they were before the storms.

Last week we talked about buyer and seller remorse, but the deeper emotional issues are losing your home and your possessions. Most people have an emotional attachment to their homes and their community. Seeing disruption or actual loss has a lasting effect. A home is part of a community of friends, family, neighbors and memories.

Adding to the emotional loss is the sudden financial hardship of losing one’s home or experiencing major and costly repairs. Most people invest a huge portion of their net worth into their home and have accrued a great deal of equity, so watching it go literally down the drain leaves many homeowners worrying about their future financial security.

For Island people who have made the decision to move, selling after a major disaster can be challenging at best. These are the sales numbers the Realtor Association of Sarasota and Manatee provided for the two zip codes on Anna Maria as of February:

Zip code 34217, Bradenton Beach and Holmes Beach single-family homes: The median sale price in February was $1,105,000, down 39% from last February. The average sale price was $1,414,583, down 52.4% from last year, and new listings are up 33.3%.

This is the report from The Realtor As­sociation for condos in Bradenton Beach and Holmes Beach. The median sale price was $535,000 this February, down 13.7% from last year and the average sale price was $553,333, down 26.1%. New listings are up 6.7%.

Obviously, the single-family numbers look far worse than the condos, likely because there are so many single-family homes that were not elevated and had se­vere damage selling for reduced numbers compared to last year. The majority of condos are elevated and experienced less damage, at least from flooding.

Anna Maria, zip code 34216, had a median sale price of $1,750,000, down 12.5% this February compared to last year. The average sale price was $1,808,333, down 27.6% from last February. Finally, new listings in Anna Maria are up 31.6%.

Selling your home in the aftermath of a disaster requires patience and a fair amount of creativity. These properties need to be marketed as the future value, not the present value. There is great investment opportunity on the Island and based on the number of visitors in the past month, people still want to vacation here.

Buyers, especially younger buyers, are very much influenced by climate change and the effects that it will have on a barrier island. So, a balance has to be struck when listing the benefits and financial invest­ment available on Anna Maria Island. You can’t hide that we experienced a serious series of storms, and you have to be honest about damage sustained, but here again, we’re looking at future growth.

The effects of the storm, both physically and monetarily, are deeply unsettling. The physical landscape of the community changes and people move away, leaving a constant feeling of loss. It’s important to stay focused on how Anna Maria Island was before the storm and know it will come back right along with property values.

It’s the buyers turn

Written by Louise Bolger on . Posted in Business, Real estate | Development.

Balance of power is something we usually talk about as it relates to international positioning between powerful nations. Now the phrase is lending itself to the real estate market and the buyers are finally getting the upper hand.

Homebuyers are benefiting from the fading disappearance of bidding wars. Sellers are willing to lower prices and offer incentives. Increased home listings are working to the advantage of buyers with less competition and more negotiating room. And most important of all, sellers are becoming more flexible, accepting offers below the asking price especially for properties that need repairs – like on Anna Maria Island – or proper­ties that are in less desirable areas.

However, all real estate markets are not equal. The National Association of Realtors indicates that homeowners with ultra-low mortgage rates have been reluctant to sell, but that is starting to loosen up as more people decide they can’t keep putting off a move and wait for rates to take a nosedive. The rates are starting to trend under 7% but not enough yet to move the needle and change the real estate market.

Housing inventories are also rising in certain states where properties look overvalued, so buyers are backing off. Because of the migration to the Sunbelt states during the pandemic, property prices in some southern states rose faster than in other parts of the country. In Florida, for instance, the value of the median home increased 64% over the past five years according to Redfin, compared with 42% in Illinois and 17% in New York. As we know, many of our out-of-state residents come from Illinois and New York.

The huge increase in value that Florida has enjoyed is slowing down as migration to Florida has slowed. The state is importing fewer new high wage earners to support the home prices and the insurance costs, putting affordability of home ownership out of balance for many buyers. Nevertheless, Florida is still a popular state and very tax friendly compared to northern states, with insur­ance costs starting to trend downward.

February sales statistics for Manatee County are out, published by the Realtor Association of Sarasota and Manatee:

Single-family homes closed 22.1% more properties since February of last year. The median sale price was $480,000, down 8.6%, and the average sale price was $662,504, down 10%. Median time to contract was 49 days compared to 35 days last year, and the month’s supply of available properties was 4.6 months compared to 3.9 months last year.

Condos closed 7% fewer properties this February compared to last. The median price was $335,990, down 6.1% and the average was $408,238 down 7.5%. Median days to contract was 60 days compared to 47 days last year and the month’s supply of available properties was 8 months compared to 5.6 last year.

The wrap-up on these numbers indicate that sellers are no longer in a competitive market and need to adjust their expectations. Median sale prices are down, it’s taking longer to sell and new listings are going up across all categories.

Homebuyers have the most leverage over sellers in years. In our region, last year’s storms have increased that leverage. Eventually the market will catch up to the number of properties available, so pay attention buyers, this is your window.

It’s the buyers turn

Written by Louise Bolger on . Posted in Business, Real estate | Development.

Balance of power is something we usually talk about as it relates to international positioning between powerful nations. Now the phrase is lending itself to the real estate market and the buyers are finally getting the upper hand.

Homebuyers are benefiting from the fading disappearance of bidding wars. Sellers are willing to lower prices and offer incentives. Increased home listings are working to the advantage of buyers with less competition and more negotiating room. And most important of all, sellers are becoming more flexible, accepting offers below the asking price especially for properties that need repairs – like on Anna Maria Island – or proper­ties that are in less desirable areas.

However, all real estate markets are not equal. The National Association of Realtors indicates that homeowners with ultra-low mortgage rates have been reluctant to sell, but that is starting to loosen up as more people decide they can’t keep putting off a move and wait for rates to take a nosedive. The rates are starting to trend under 7% but not enough yet to move the needle and change the real estate market.

Housing inventories are also rising in certain states where properties look overvalued, so buyers are backing off. Because of the migration to the Sunbelt states during the pandemic, property prices in some southern states rose faster than in other parts of the country. In Florida, for instance, the value of the median home increased 64% over the past five years according to Redfin, compared with 42% in Illinois and 17% in New York. As we know, many of our out-of-state residents come from Illinois and New York.

The huge increase in value that Florida has enjoyed is slowing down as migration to Florida has slowed. The state is importing fewer new high wage earners to support the home prices and the insurance costs, putting affordability of home ownership out of balance for many buyers. Nevertheless, Florida is still a popular state and very tax friendly compared to northern states, with insur­ance costs starting to trend downward.

February sales statistics for Manatee County are out, published by the Realtor Association of Sarasota and Manatee:

Single-family homes closed 22.1% more properties since February of last year. The median sale price was $480,000, down 8.6%, and the average sale price was $662,504, down 10%. Median time to contract was 49 days compared to 35 days last year, and the month’s supply of available properties was 4.6 months compared to 3.9 months last year.

Condos closed 7% fewer properties this February compared to last. The median price was $335,990, down 6.1% and the average was $408,238 down 7.5%. Median days to contract was 60 days compared to 47 days last year and the month’s supply of available properties was 8 months compared to 5.6 last year.

The wrap-up on these numbers indicate that sellers are no longer in a competitive market and need to adjust their expectations. Median sale prices are down, it’s taking longer to sell and new listings are going up across all categories.

Homebuyers have the most leverage over sellers in years. In our region, last year’s storms have increased that leverage. Eventually the market will catch up to the number of properties available, so pay attention buyers, this is your window.

Tax relief on the beach

Written by Louise Bolger on . Posted in Business, Real estate | Development.

It’s tax time again and tax time is never fun, but this year could be particularly not fun. In view of the 2024 storms, this tax filing season could be quite a bit different in addition to the normal tax benefits afforded homeowners.

I’m not a licensed CPA or even a tax preparer, so you always need to seek advice from a professional when it comes to finance of any type. I did, however, find a couple of points related specifically to Hurricane Milton. On Oct. 11, 2024, the IRS announced disaster tax relief for 51 counties in Florida.

Affected Florida taxpayers will now have until May 1, 2025, to file various federal tax returns and make certain tax payments. In addition, Hurricane Milton was considered a federal disaster, therefore, personal casualty losses can be deducted to the extent the losses are attributable to a federally declared disaster.

In normal times for the average taxpayer, your home is still the best shelter from taxes. Mortgage interest for a first or second mortgage or home equity loan is a deduction for taxpayers who itemize deductions. This deduction is for your primary home and to a lesser degree for a second home.

Local property taxes can be deducted subject to the SALT (state and local taxes) cap, which is $10,000. However, the cap is very controversial and there is an ongoing battle in Congress to get it reversed. SALT is part of the temporary 2017 tax law that is due to expire at the end of 2025 which could affect taxpayers in all states with high property taxes.

Home office deduction is frequently a gray area for people who do a lot of work from home. The law is if you receive a W-2 from an employer you cannot take the deduction for working from home no matter how much work you do for your employer from your home. The deduction is for individuals who use part of their home exclusively and regularly for business purposes.

There is a long list of expenses you have in running your home that you cannot deduct: Insurance, including title insur­ance; wages you pay for domestic help; depreciation; utilities and home repairs; internet or Wi-Fi access; and homeowners or condominium association fees.

The government does provide certain credits affiliated with energy-efficient home improvements up to $3,200 a year. The credit is for 30% of the cost of the improvement. Insulation, windows and doors qualify as well as heat pumps, water heaters and biomass stoves. In addition, homeowners who add solar, wind or geothermal power generation, solar water heaters or battery storage to their homes can claim a residential clean-energy credit.

The biggest tax savings, however, is when you sell your home, particularly if you have accrued a large amount of appreciation in your property. The gain in value in your property is the difference between the selling price and the adjusted base, which includes what you paid for the house, plus renovations or other capital improvements, which could be a long list.

In addition, the government gives homeowners a home-sale exclusion which further limits your capital gains. The exclusion for single tax filers is $250,000; for married couples filing jointly, it is $500,000. To qualify you must have used the house as a primary residence for at least two of the previous five years.

Good luck with your taxes. Remember to always consult a tax professional, especially this year if you have had home damage. Be happy it only comes once a year.

Life-changing events can reset priorities

Written by Louise Bolger on . Posted in Castles in the Sand, Real estate | Development.

To say that a combination of Hurricane Helene and Hurricane Milton less than two weeks apart changed the lives of everyone on Anna Maria Island and most of the coastal areas of Manatee County would be a gross understatement. Some areas came back sooner than others, but everyone was influenced by the storms and shocked at the amount of cleanup and repairs needed to get their lives back fully on track.

Last week we reviewed the Manatee County sales statistics provided by the Realtor Association of Sarasota and Manatee along with their ac­companying news release. Essentially, they’re saying our real estate market all over the county is changing to a buyer’s market, no surprise there. The surprise is how fast it happened and how fast fortunes can disappear.

I haven’t made a comparison of listings compared to pending proper­ties in a long time, but in view of this month’s numbers, it’s probably time; please note the listings include all variety of properties.

Starting with the City of Anna Maria, as of this writing, there are 70 properties available for sale ranging from $20 million to $549,900. There are nine in the upper range above $6 million, 38 in the mid-range and 23 at $2 million and lower. The upper range listings had no pending properties, the mid-range had three pending proper­ties and the lower range had five pending properties, for a total of eight pending properties out of 70 listings.

The combined cities of Holmes Beach and Bradenton Beach had 232 listings as of this writing, ranging from $16,750,000 to $60,000. There were 14 properties in the upper range above $6 million, 46 properties in the mid-range and 30 properties in the lower range below $2 million. The upper range did not have any pending properties, the mid-range had two pending properties, and the lower range had 32 pending properties. The total listings combined in the three cities on Anna Maria Island were 302 with 40 pending – you do the math.

The village of Cortez had 32 proper­ties listed ranging from $3,899,000 to $79,500 with two pending.

Although we experienced devastat­ing storms, giving our real estate market an unexpected blow, the coun­try as a whole is also experiencing a downward market. Data from the real estate analytics firm CoreLogic shows nearly 73,000 homes were pulled from the market after they failed to find a buyer in the final month of last year.

Sellers are reluctant to take lower prices especially if it means giving up their ultra-low mortgage rates. Home sales in 2024 were at their lowest level in nearly 30 years. Eventually sellers will slowly be more realistic if they need to sell because of a job, growing family or other life events that can’t be delayed. Green Street, another analyt­ics firm, predicts that U.S. home prices are vulnerable to a correction.

On the other hand, the luxury home market is putting a lot of pressure on the entry level home market. As prices go up in the luxury market, it takes everything below right along with it. This is true in the Miami area with their influx of the super-rich moving the annual number of home sales above $1 million up 147% compared to 2019.

Sometimes life-changing events are good to reset our priorities in life and remind us how quickly things can change. Keep cleaning, keep painting and be happy – you still can.

Everything is negotiable

Written by Louise Bolger on . Posted in Business, Real estate | Development.

About a month ago, we talked about being in uncharted territory as it relates to the real estate market. Not much has changed for the better in the last month and the statistics for January will confirm that. However, properties are still being listed, and buyers are still out there, and as usual, sellers want top dollar and buyers want bargain basement prices.

One of the tenets of the real estate industry is the ability to negotiate price. According to a survey conducted by Lending Tree in May 2023, 63% of buyers have successfully negotiated a home’s price, 38% negotiate closing costs and 36% negotiate repairs.

The terms of an offer are every bit as important as the price. This includes closing date, mortgage contingencies and furniture. And don’t take the furniture is­sue lightly, especially for condos in Florida. It’s pretty common to purchase condos, even luxury condos, with the furnishings, including furniture, wall coverings and even other decorative objects.

If you are negotiating a sale including what would be considered personal items, make sure there is a detailed list of what is being conveyed with the property as part of the contract of sale. In your mind, your grandmother’s original Tiffany lamp will, of course, not leave the family, but the buyer assumed otherwise when you negotiated the personal items. And don’t think buyers, especially in the uncharted territory we’re in right now, won’t walk because of this dispute.

Information is powerful, particularly during the negotiating process. The more you know about the buyer and seller the more power you have, for example, buyers who have already sold their home or are in contract to do so, or sellers who have other buyers in the background or have had no showings in months.

By far the most important thing you can do when negotiating is to be respectful of the other parties’ position and don’t make demands. If you’re successfully diplomatic, you can turn down an offer and still leave the door open in a reasonable way by asking for a reframing of the offer.

Time to see what the Manatee County sales statistics look like for the month of January, reported by the Realtor Associa­tion of Sarasota and Manatee:

Single-family homes closed 22.1% more properties. The median sale price was $480,000, down 8.6% from January of last year, and the average sale price was $662,504, down 10.0%. Median time to contract was 49 days compared to 35 days last year, and there are 8.5% more listings this month compared to last year. The month’s supply of available properties was 4.6 compared to 3.9 months last year.

Condos closed 7% fewer properties compared to last year. The median selling price was $335,990, down 6.1%, and the average sale price was $408,238, down 7.5%. Median time to contract was 60 days compared to 47 days last year, and new listings are up 2.2%. The month’s supply of available properties was 8 months compared to 5.6 months last year.

The Realtor Association points out three trends: A decrease in median sale prices across all property types, increased time to sell and contract – meaning it is taking longer to sell across all segments – and finally, there is some growth in closed sales, likely leftover transactions from the end of last year.

So much of buying and selling residential properties is emotional, so keeping your emotions in check will serve you better. You could, of course, read “The Art Of the Deal” written by Donald Trump for pointers in negotiating. Just be careful, negotiating is certainly an “art,” so hard and fast rules don’t apply.

Expenses increasing for homeowners

Written by Louise Bolger on . Posted in Business, Castles in the Sand, Real estate | Development.

The day you close on your home, whether it’s your first or fifth, is always a happy day – almost as happy as the day your mortgage commitment is approved – but that’s just the beginning of homeownership.

As any homeowner can tell you, the expenses of owning a home in recent years have risen to the point where the mortgage payment, in spite of elevated interest rates, is frequently less than the combination of other monthly expenses.

Last week, we talked about insurance, and that, of course, is probably the biggest expense after the mortgage payment. Buyers should shop around for insurance quotes prior to committing to a property to purchase, especially in areas of the country like ours that are prone to natural disasters. According to the International Exchange, the cost of $1,000 of coverage in areas prone to hurricanes and wildfires is more than three times the national average.

Property taxes are also a large portion of your monthly carrying charges and can increase as the value of your property appreciates. In Florida we have home­stead exemptions for full-time Florida residents, which lock in the value of your property, but this is not true in other regions of the country. This is one of the reasons why Florida still imports new residents from other parts of the country with much higher property rates. It’s also why so many Florida homeowners, many of whom have second homes here, convert to full-time residents.

For potential condo owners, associa­tion fees in the form of monthly fees and special assessments is a big-ticket item. The monthly fees are disclosed in the real estate listing, however, special assessments for storm damage or large repairs that haven’t been anticipated will likely be funded by special assess­ments that generally do not appear on the real estate listing.

Special assessments that have been ap­proved by the board but not yet assessed to the owners will appear in the minutes of the board meeting from the date of the vote. However, there could be other discussions about potential assessments that are still in the decision-making stage that are also in the board of directors meeting minutes that will be important to a potential buyer.

Utility bills are frequently underesti­mated when budgeting; electricity, gas, oil and water bills are increasing yearly. Water bills are a special concern in Florida, especially during our dry season, and nationally, the average water bills are nearly $1,000 a year.

It goes without saying that routine maintenance is an ongoing expense when you purchase a property. You never really know when you might need to replace an appliance or take care of landscaping problems and heaven forbid the air conditioning/heating system decides to blow up during August. Zillow estimates that an average of about $500 a month should be anticipated for home maintenance, a number that smart buyers will allocate in a cash account.

You hear a lot of homeowners say, “We could never afford this house today,” and this is not their imagination. According to Redfin in January 2012 the household income required to afford the typical home in the United States was $39,223. As of November 2024, home buyers need to earn $126,764 annually to purchase the average home, a 223% increase.

Florida’s success as a retirement and relocation destination is threatened by the by-product of increased expenses. It’s not your parents’ Florida anymore; the bar has been raised for the good or bad.

Lipstick on a pig

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

At the risk of having all of Anna Maria Island and most of Manatee County mad at me, it looks like our current housing market is a bit of a pig. Pigs can be adorable, or they can be nasty, so I hope that our pig is trending to the adorable side.

The Realtor Association of Sarasota and Manatee published its year-end real estate market report a few weeks ago. Their job is to analyze the Sarasota and Manatee region and to put the best possible spin on the data.

Their position is that the market is transitioning toward a balance following the significant disruptions of the pandemic years. Certainly, there is increased time on the market and higher inventory. Nevertheless, this is a sign of normalization of the market similar to the pre-pandemic market of 2019.

They point to median sale prices being well above 2019 levels but there are still price declines from 2023. Transactions are slower with longer time to sale and longer time to contract increasing year-over-year. As we know, inventory has increased, shifting toward a more buyer-favorable market. According to the National Association of Realtors, existing home sales fell 0.7% in 2024 from the prior year.

Nationwide, U.S. existing home sales fell in 2024 to the lowest level since 1995. Much of this is due to higher interest rates, which just topped 7% a couple of weeks ago, a psychological tipping point. Higher home insurance rates all over the country and property taxes are adding to the pain of buyers, and we are yet to see the effect that the storms and fires will have on homeowner insurance.

Since the country is still trying to dig out of a recession, the weak housing market is just adding to that problem. Everyone in the real estate industry – including contractors, furniture retailers and appliance stores – is hurting. It will also have an impact on the Federal Reserve’s decision on lowering interest rates.

I’ve talked about this many times, but although to a lot of buyers 7% interest rates are incredibly high, they’re not. The real estate market has survived years with double digit rates and people still bought houses. The financial markets are very fluid and homeowners can always refinance down the road if there is a drop in rates.

One other piece of news I found that I thought was worth mentioning is California residents looking to Florida as either a temporary or permanent relocation. There has been a flurry of California transplants trickling into Florida for a while to escape high taxes, so it’s not surprising this may be increasing.

Brokers have reported a lot of inquiries from California residents who need immediate housing or some who were already interested in the Florida market and are now getting serious after the wildfires. Florida is one of the top locations the fire victims are looking at for refuge along with Texas, the Carolinas, Tennessee and Nevada.

Anna Maria Island in many ways is perfect for California residents with our beautiful beaches and many available properties to invest in. If indeed we see this activity, keep in mind these buyers are high-end buyers and are smart, so don’t overprice properties.

My usual optimistic outlook about real estate is waning a little. I’m probably suffering the same malaise as so many of us. However, after four months, it’s time to get back on the horse or the pig and move forward.

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.

Murphy’s laws in full operation

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

We’re living through the time of Murphy’s Laws. Murphy’s Laws encompass a series of life’s lessons, all of them meant to be a warning not to get too comfortable with the way things are.

Florida residents were victims of some of Murphy’s Laws last year. One of them, “Nature always sides with the hidden flaw,” and “If there is a possibility of several things going wrong, the one that will go wrong is the one that will cause the most damage.”

Did we on the central west coast of Florida get too comfortable with our relationship to hurricanes, and did we start believing the old Indian sacred burial ground stories? Maybe, but as Murphy’s Laws state, “If everything seems to be going well, you have obviously overlooked something.”

Now in the aftermath of the storms and the effort to rebuild, we have a new set of issues to deal with. Hiring workers to help rebuild has become a cottage industry for island and coastal residents trading stories, names and phone numbers. The first call I received from a neighbor after the storm passed was did I know a sheetrock contractor, the first of many who would ask that question.

Practically everyone I know is looking for painters, finishers, shutter repair companies and, most of all, hairdressers who are open and running. Even after the electricity was restored, Wi-Fi was slow and intermittent, preventing residents from researching and filing claims. Parents with school age children had additional stress when AMI Elementary was closed.

In the midst of all this uncertainty, most of us still had to deal with the normal everyday issues of life; shortages in the grocery stores, car breakdowns and relatives who want to come down for their winter vacation and don’t or can’t really appreciate the level of damage we were living through.

The first day of the California wildfires, I was sitting in my living room looking at my still not fully repaired loft ceiling feeling sorry for myself and was suddenly jolted into reality about the important things in life. Unfortunately, Los Angeles County has experienced possibly the worst human tragedy imaginable. As terrible as a strong hurricane is, at least you have a home or part of a home to go back to. Californians in most of the fireball areas have literally nothing to go home to.

In my mind, everything is always about real estate, and I’m not far off since homes represent the majority of wealth that Americans accrue. Many of the residents of these burnt-out properties will eventually sell to developers and investors, which will change the complexion of their neighborhoods much like I expect Anna Maria Island will change.

In addition, Los Angeles is victim to another of Murphy’s Laws, the one that says, “In any field of endeavor, anything that can go wrong, will go wrong.” Again, unfortunately for the residents of Los Angeles, their elected and appointed officials appear to have dropped the ball in several areas. We in Manatee County should forever be grateful for the fast action of both the county and the state governments in getting us back to normal quickly. I won’t forget how I felt a couple of days after the storm when I saw our governor standing next to 5 feet of sand in Bradenton Beach.

Finally, Murphy’s Law says, “Left to themselves, things always go from bad to worse.” The lesson here is to take action and control in order to get your lives back. The real estate market will come back with a vengeance because we have something to sell that few areas do.

Thoughts and prayers to the residents of Los Angeles.

Get out your calculators

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

If it’s costing you more to live these days, it may not be just your grocery bills; there are additional expenses in almost all aspects of our lives. Basically, better get out your calculators and see where you can stem the tide before you start drowning.

One of the biggest increasing costs for homeowners is property insurance. Insurers have been raising rates to compensate them for losses from natural disasters for several years now, but after this year’s expenses are calculated, the increase in premiums could be staggering.

Keep in mind this has nothing to do with flood insurance, which is managed by the federal government, and have been kept artificially low. This may come to an end soon since the government is now looking at their losses in coastal areas and attempting to mitigate that loss.

Last year, FEMA changed the way it calculates flood insurance prices. Instead of relying on old flood zone maps covering broad areas, it’s now basing premium prices on a wider range of factors, like an individual property’s distance from the ocean, rainfall levels and the cost to rebuild a home. This system sure looks a lot like the model private insurers use to determine their premiums.

The second major factor facing homeowners is an increase in property taxes. In September, 32% of the average single-family mortgage payment went to property taxes and home insurance. This is the highest since 2014, and in many metro areas this number reaches 50%.

The triple threat of rising taxes, homeowners’ insurance and fluctuating mortgage interest rates is keeping homebuyers out of the market. This is keeping the number of sales down, but the prices are still high. With sellers’ fears escalating, there could easily be an adjustment in selling prices.

Many senior homeowners on fixed incomes are having difficulty keeping up with the increase in expenses and are facing the possibility of a relocation to a less expense lifestyle. In addition, young families who bought at the margin of what they could afford are also struggling with the additional homeowner expenses, school costs, gasoline and food.

In spite of all of the increase costs, homeowners still want to give their homes a facelift, either to prepare for sale or just for personal enjoyment. If you’re thinking of this there are a few upgrades you would want to skip: Kitchen remodeling with anything but the most neutral materials is not going to get you money back; home extensions like oversized primary suites may make purchasers swoon, but they won’t pay more for it; and expensive or custom exterior upgrades like roofs and trim should be replaced with the moderately priced choices that look new.

There are plenty of low-cost items that can be upgraded and will give you good value for your money: The big one is paint, it’s cheap and leaves a clean appearance; replace old carpets, wash windows, clean the bathrooms of anything that looks like mold and declutter.

We’re all in this together since housing is so much a part of our lives and economy. And as far as calculators are concerned, I suggest you get a nice big one with oversized numbers to go with your oversize expenses.

Mortgage interest rate future ‘uncertain’

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

Happy New Year, although this year may not be so happy for homeowners and worse for potential homeowners. Both groups are getting hit with increasing costs they never assumed would come. More next week about the growing expense of owning a home.

On Dec. 18, the Federal Reserve enacted a quarter point reduction in interest rates. Sometimes financial markets and mortgage rates react favorably to rate reductions and sometimes they don’t. This time, both the stock market and the mortgage markets didn’t like it. The stock market took a dive, losing more than 1,100 points for the Dow and the mortgage rates for the following two weeks went up.

The reason for this is the Federal Reserve signaled earlier that inflation was under control and they anticipated further rate reductions going forward. Well, we all know that we probably won’t see 3% mortgage interest rates again, but buyers and investors were anticipating at least a little relief on rates. The Federal Reserve backed off their “inflation is under control” narrative and didn’t leave much hope for future rate adjustments.

Mortgage rates for a 30-year fixed rate mortgage went up to about 6.7% from around 6.4% or 6.5%. It doesn’t seem like a lot, but every increase results in lowering the amount of home purchasers can afford.

The projection for 2025 isn’t much better, either, in spite of the fact that in January 2023 some analysts thought rates would be around 4.5% by the end of 2024, obviously a major overstatement. Federal Reserve Chair Jerome Powell says: “Forecasts are highly uncertain, forecasting is very difficult.” This is where my head started to explode.

Nevertheless, the big brains of finance who admit to the difficulty in forecasting are still forecasting for the new year. So, here’s what some of them are saying.

Fannie Mae’s chief economist says, “Long-run interest rates have moved upward over the past couple of months following a string of continued strong economic data and disappointing inflation readings.” They are putting the average 30-year fixed rate at 6.5% in the beginning of 2025, declining to 6.1% in 2026.

The Mortgage Bankers Association (MBA) in its 2025 finance forecast indicates that mortgage rates will gradually slide from 6.6% at the beginning of 2025 to 6.3% through 2026.

The National Association of Home Builders is forecasting 6.12% in 2025 and 5.71% in 2026. The National Association of Realtors (NAR) is predicting 5.9% in 2025 and 6.1% in 2026. And, finally, realtor.com is saying only that in 2025 the range will be between 6.2% and 6.3%. It is interesting that the organizations involved in actually selling homes are more optimistic than the financial institutions.

Getting back to Fannie Mae, they are saying the 30-year fixed rate mortgage rate is now expected to stay elevated between 6% and 6.5% for the next two years. But since “forecasting is difficult,” who really knows?

My advice to potential homeowners who require a mortgage is act now, since you really won’t know what the rates will be going into 2025. If you find a home you like that you can afford, putting it off waiting for a better mortgage rate is a bad decision. You’ll never catch up with the market just waiting for a ½ point decline or even a full point decline. Live your life now, buy your home and get a crystal ball.