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Tag: Anna Maria Island real estate

Winter of the big freeze

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

You should have warmed up from the unusually cold Florida winter. Now the question is, has the housing market unfrozen? The entire country has been gripped in an exceptionally cold and stormy winter, including sections of the south like Texas, Tennessee, Georgia and, of course, Florida. In January, more than 93 million people across the country were under windchill advisories as low temperatures stretched both north and south.

We don’t know yet what effect the cold Florida weather has had on the tourist season; it could work both ways. However, make no mistake about it, weather during the winter in the northern states has a profound effect not only on our tourist market but also on our real estate market.

The success of the Florida real estate market depends to a good degree on the northern markets and their ability to sell their homes. True, falling mortgage rates have encouraged home shopping activity in January, bringing buyers back in the market, but first they must get here, and many of our buyers are frozen in place.

Since last year was the worst year for existing home sales since 1995, anything will look good. It’s predicted that home purchases won’t return to normal levels unless mortgage rates fall further. A rate below 6% is a key level to attract more buyers and, despite the recent increase in activity, we are far from a healthy housing market. A lower mortgage rate will also likely attract current homeowners who want to move up or down but feel frozen, that word again, at their ultra-low mortgage rates.

On Anna Maria Island, the number of available listings compared to those pending are as follows as of this writing:

Anna Maria has 112 properties available and six pending. Listing prices range from a low of $895,000 to a high of $12,000,000.

The combined cities of Bradenton Beach and Holmes Beach have 217 properties available and 40 pending. Listing prices range from $100,000 to $31,750,000.

Cortez has 19 properties available and seven pending. The listing prices range from $595,000 to $1,900,000.

Keep in mind available and pending properties are just a snapshot in time. The figures can change daily and frequently do, nevertheless, it’s still interesting to see the movement of the real estate market.

The above numbers represent properties ranging from building lots, boat slips, mobile homes, condos, single-family homes and duplexes. And it clearly explains what a diverse area we’re living in with a wide range of price points and the choice of lifestyles available.

Listings are up and we’ve been waiting for that to happen so that’s the good news. Let’s hope when the thaw comes, so will the buyers. I’ll leave it to you to interpret these numbers however you like. Typically, the busy selling months are March, April and May before the real buyers go back north, so let’s assume our market is only experiencing a temporary pause.

The country is thawing out and we certainly are too. In our typically strong selling season, the time when lookers turn into buyers is still ahead. After the thaw, the statistics will tell the real story about the effects of the winter of 2024.

Are mortgage rates really going down?

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

Did we ever think this day would arrive? Those in the know kept saying rates will be better next year, and this is finally next year, and by golly, it appears they were right. Since nothing is ever that easy, there are discrepancies in rate predictions but generally the arrow is pointing down.

Forbes is predicting three rate cuts this year, assuming that inflation continues to slow. The National Association of Realtors’ Chief Economist Lawrence Yun says that because high budget deficits and inflation are still not at a comfortable level, mortgage rates will likely be in the 6% to 7% range for most of the year.

The Mortgage Bankers Association is forecasting 6.1% at the end of this year and 5.5% at the end of next year. Bank of America’s head of retail lending Matt Vernon is more cautious. He says rate cuts could breathe new life into the housing market but significant drops in mortgage rates might not happen in the early months of 2024. The Fannie Mae housing forecast is that the 30-year fixed rate mortgage will average 7% in the first quarter of this year and slowly decline over the year, landing at 5.5% in the fourth quarter. There certainly are more opinions but these are some of the top players in the industry and apparently, they all are looking to decline.

As of this writing, the average rates were 7.45% for a 30-year fixed rate and 6.68% for a 15-year fixed rate. Not bad, but we’re not there yet as you can see from the above opinions, however, there are ways to obtain a better rate now.

Boosting your credit score is a surefire way to pay a lower interest rate. Just a few points can help a lot and here are tips on how to achieve this: Make an extra payment on an existing mortgage or on credit card balances, spend less than 30% of the amount of credit offered to you on credit cards and pay off your balance each month in full.

You can also reduce your mortgage rate by paying points upfront on a new mortgage. Do the math and see if out-of-pocket money now to lower your long-term rate works for you. Finally, shop around and don’t take the first offer from a lender you call.

Let’s see what our January sales in Manatee County are, as reported by the Realtor Association of Sarasota and Manatee:

Single-family homes closed 10.9% more properties compared to January of last year. The median sale price was $525,000, up 3.8% and the average sale price was $735,836, up 13.1%. The median time to contract was 35 days this January compared to 32 days last January. New listings were up 32.3% from last January and the month’s supply of available properties was 3.9 months compared to 3.2 months last year.

Condos closed 8.8% more properties compared to January of last year. The median sale price was $357,990, up 3.8%, the same as single-family homes, and the average sale price was $441,573, up 12.6%. The median time to contract was 47 days this January compared to 26 last January. New listings were up 37.9%, and the monthly supply of available properties was 5.6 months compared to 3.2 months.

The increase in listings we’re seeing points to a more balanced market that favors buyers, along with the interest rate arrows pointing down. The weather arrows, however, are starting to point up, so go to the beach and let the real estate market find its own level.

In love with luxury

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

Happy Valentine’s Day! Every year this day is put aside for the lovers of the world and the greeting card companies. But this year, deep-pocket lovers have even more to be in love with, since luxury real estate has a new benchmark of an outrageous $100 million.

Granted, this number isn’t for everyone. In fact, only 5% of the overall housing market is defined as luxury, but we can all dream, can’t we? Based on how quickly Anna Maria properties have increased in value over the past three years, why shouldn’t $100 million be the new norm for a narrow percentage of the population?

According to The Wall Street Journal, since 2020, at least 24 homes nationwide have traded for $100 million and up. Florida has had a dramatic increase in nine-figure transactions in recent years. Since 2020, three homes over $100 million have changed hands in New York City compared with six in and around Palm Beach. Tampa is also benefiting from the ultrarich due to the lack of available luxury properties in the Miami area. Tampa’s sales have been boosted by 35.8% in the luxury market during the third quarter of 2023 compared with the same period last year, bringing in buyers who were disappointed with the availability of high-end homes on the east coast of Florida.

In 2023, there was a record set for a sale in Florida of $170 million. A broker selling high-end properties in Palm Beach said there are more billionaires than there are oceanfront estates to sell them. Don’t get too comfortable with the $100 million benchmark, $200 million is waiting in the wings as the number of billionaires around the world grows. There were 3,194 billionaires in 2023, up from 2,170 in 2013, according to the wealth research firm Wealth X.

The ultra-rich aren’t much different from any buyer. Not comfortable with the higher interest rates, especially for jumbo loans, they’re using cash to buy their estates. These cash buyers are propping up the overall real estate market, shifting from a downturn in late 2021. According to Redfin, the median luxury sale price during the third quarter of 2023 rose 9% year-over-year to $1.1 million, almost three times the annual jump for nonluxury homes, which rose only 3.3% during the same period. The median price is the mid-point of sale prices; half of the sales are above and half are below.

Redfin also reports that 42.5% of luxury buyers paid cash during the third quarter of 2023 compared to 34.6% during the same period the previous year. In the third quarter of 2023, only 28% of nonluxury homes sold for cash. In addition, inventory of luxury homes rose 2.9% during the third quarter of 2023 compared to a decline of 20.8% for nonluxury homes nationwide.

If there’s a lesson to be learned here, it’s that wealthy people watch their money the same as the rest of us and use cash if the numbers make sense. It also means that it’s far better to be rich and have the option of an all-cash offer on a property.

Be careful, the ultrarich will be coming for your home when the inventory of appropriate billionaire estates runs out, and Anna Maria Island is prime for their next stop. Nevertheless, the Gulf of Mexico that we all love is the same whether your home is a cottage for $1 million or a sprawling estate for $100 million. Luxury is in the eye of the beholder.

Condominium disclosures a different animal

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

There are loads of different animal species in the world and although some are part of the same group, like mammals, they still have differences within their group. This is the same with real estate. Family homes are one subset of the real estate group and condominiums are quite another.

Last week we talked about stigmatized properties and when and if disclosing certain information to a potential buyer is critical. Now we’ll talk about all the other typical elements of selling a condominium property that may require disclosure.

The seller’s property disclosure form outlines and questions many areas of the property. For example, condition and brand of appliances, water heaters, heating and air conditioning systems, anything permanently affixed to doors and windows like mirrors, window hardware, mounted speakers, water softener, pool and hot tub condition and many more. In addition, the seller needs to disclose any ongoing plumbing issues, roof leaks, water intrusion and wood-destroying organisms.

Homeowners’ associations have additional restrictions that must be disclosed, primarily the fees and assessments and if these items are up to date. Potential buyers will be provided with a copy of the current Declaration of Condominium and Articles of Incorporation. Buyers have three business days from the date the documents were delivered to review them and cancel the transaction if necessary.

Whether you sign a property disclosure form or not, the seller is still responsible for disclosing all items contained within the disclosure form. Since condominiums are a complex entity with a board of directors, there are discussions at board meetings that might not become a change for several months. This could involve special assessments, use-of-property rules or leasing regulations for the property.

If one of these is imposed before the effective date of the contract for sale, then of course any change must be disclosed to the buyer. However, if there is a discussion at a board meeting, a mailing, an agenda item, a note in the board meeting minutes, or even a discussion by a board member that involves a future assessment or a future material change, the best course of action is to disclose the possibility. As an additional step, researching the previous 12 months of meeting notes adds another layer of protection for the seller. By being as transparent as possible, the seller eliminates any possibility that a buyer could seek legal recourse against the seller for a post-closing assessment or material change.

While a seller’s property disclosure form is not required under Florida law, Florida does require sellers and their realtors to disclose any significant property defects that may not be easily visible to the buyer. Buyers still have the responsibility to have the property inspected.

Disclosure is a thorny thing to maneuver through when selling since there are no perfect properties. In my opinion, the best thing is always to disclose. That said, as I’ve stated many times in this space, I am not an attorney so if there is a question in your mind about disclosing, an attorney would be your best source of confirmation.

Think of selling a condominium as a subset of the real estate animal world, understand what’s unique about it and how to protect yourself in the wild real estate kingdom.

Disclosure vital in ‘stigmatized’ property sale

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

You may think in the land of sunshine, surf and sand there can be nothing defined as stigmatized. Maybe not, since the word can mean different things to different buyers.

The National Association of Realtors refers to “stigmatized property” as a property that has been psychologically impacted by an event occurring on the property, even where there was no physical harm to the property.

The typical property that is considered stigmatized by events occurring there is one where a crime occurred. A violent crime is a problem for both buyers and sellers. Buyers may not feel comfortable buying the home since they might be uncomfortable living in a property with a violent history. Because of this, sellers may face the possibility of an adjustment to their price or a renovation to remove any reminders of the event. Two infamous stigmatized properties are the house in Fall River, Massachusetts where Lizzie Bordon is said to have murdered her father and stepmother in 1892. The Borden house has been turned into a tourist attraction for those with a macabre interest. And, of course, the most well-known murder home in the country is where actress Sharon Tate and four others were murdered by the Manson Family cult in 1969. The Los Angeles house was ultimately demolished and a new home with a different address was built in its place.

A price adjustment can depend on whether the property has any notoriety attached to the violent act, especially if the event was reported in the newspapers with details and police involvement. A death on the property, whether natural or suicide, is less of an issue to most buyers. Nevertheless, in the real estate market, we’re experiencing a shortage of available properties. Buyers may be willing to overlook many negatives, especially if the pricing is favorable.

Another potential problem for sellers is not necessarily a property stigmatized because of a death or violent act, but because it is out of the norm for the region. For example, something quirky about the property, whether it’s construction or decorating that can’t be easily removed.

One-of-a-kind architectural properties not compatible with everyday living, actual castles, or castle-like construction, and caves built into the side of a mountain are all examples of stigmatized properties. The problem here is the narrow market for unusual properties and the impact that may have on their value.

The National Association of Realtors goes on to say that selling a property with a reputation may be difficult. In Florida, state laws do not oblige a seller to reveal extraordinary occurrences such as a crime, suicide or unnatural death that occurred on the property or even cases where there are reported hauntings.

However, sellers and their agents would be advised to disclose all potential psychological negatives about the property. Hauntings might be a stretch to disclose but certainly, deaths of any kind could come back to haunt the seller if withheld.

That said, there are certain disease-related negatives that buyers may want to know about, like AIDS and COVID-19. This is a very gray area and may be considered a protected class and not able to be disclosed. This type of situation requires careful consideration and legal input if you are an owner getting ready to sell a similar property.

Like all discussions about disclosure, whether it’s water pipes or death, always best to be cautious and disclose. Grandma’s ghost and nasty sharks in Tampa Bay may be exceptions.

Changing tides

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

Every day I watch the tides change. Sometimes they’re low, sometimes they’re high, and every day is different. You could say almost the same thing about mortgage interest rates, but the tides for rates are starting to get lower.

Mortgage rates are ringing in the new year much lower than their near 8% peak this past fall. The 30-year fixed rate mortgage has decreased for multiple weeks with a slight uptick. However, the overall trajectory of mortgage interest rates in 2024 is expected to decrease according to the National Association of Realtors.

While mortgage interest rates ease there will be weekly shifts in the average rate, however, the National Association of Realtors is predicting that the 30-year fixed rate mortgage will average 6.3% in 2024. Between late October and mid-December 2023, the 30-year fixed rate mortgage decreased by more than a percentage point. In real money, the difference between a 6.62% rate and a 7.12% rate is $173 monthly on a $400,000 loan, enough of a difference for some buyers to qualify for a home or a better home. Lower mortgage rates are certainly welcome and will make news, but the problems of dealing with the challenges of low inventory and high home prices will not change quickly on a national basis and may continue to rise. Buyers are more optimistic but are still facing a lack of properties that are being held onto by owners with ultra-low mortgage rates.

End of year 2023 sales and December sales for Manatee County are both looking better than the national numbers. Let’s see what those statistics look like reported by the National Association of Realtors and the Realtor Association of Sarasota and Manatee.

Nationally, sales of previously owned homes dropped to the lowest in 28 years, down 19%. Manatee County single-family sales were up 7.3% and sales of condos were down 0.8%. The single-family median selling price for Manatee County in 2023 was down 2.1%, but the median selling price for condos was up 5%.

The December sales compared to December 2022 nationally for previously owned homes fell 6.2%. Manatee County’s single-family closed home sales were up 13.6% from December 2022 and the median sale price was $499,900, down 1.4%. Condos closed 25.4% fewer in December 2023 compared to the previous year, and the median sale price was $350,000, up 1.6% from December 2022.

The month’s supply for both single-family and condos is up. Single-family homes have a 3.3-month supply of properties available and condos have a 4.6-month supply of properties available.

Our area continues to outpace the national market. Manatee County appears to be stabilizing with more inventory available and is pointing to a good upcoming sales season, however, what happens overall in the country can still affect Florida.

We’re all hoping for a good year since the tide of real estate has an overall effect on the economy. The number of properties sold impacts the furniture business, remodeling companies and the sale of everything from paint to lawnmowers. The jobs market is also closely tied to the real estate market, not only in retail but for real estate companies and their employees.

The owner of the first real estate company I worked for once said, “If you’re gone for a week, the entire real estate market is different when you return.” That is essentially true. Properties sell, others are listed and interest rates change. The ebb and flow dictate the marketplace and always will.

New world order: Renting

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

Like fashion, real estate goes in and out of vogue. What was all the rage in one decade can be out the next. Well, now the real estate reset is homeownership.

My parents grew up in a big city that, not unlike other big cities, had more renters than owners. The suburbs didn’t exist and most people either lived in the “city” or the country. As we all know, after World War II, homes were built creating suburbs adjacent to big cities and for the first time, middle-class people could buy a home near where they worked.

We’re seeing the beginning of a new trend and Americans who would traditionally be homeowners have become long-term renters, many of whom have made this choice as a lifestyle change.

For decades renting was only a steppingstone for the upper and middle class before it was time to buy. Owning a home was always considered by most families their major asset and they depended on building equity in that home. But what we’re starting to see now are high-income families and seniors who aren’t ready for retirement communities but don’t want the responsibility of home ownership opting for renting.

These new American renters are looking for luxury and services including concierge services and amenities. They’re choosing to invest their money or spend it on vacations and their children’s education. Benefiting from tax breaks and capital gains exclusions no longer holds the same appeal. Investment portfolios are being reworked to invest in tax-free products and municipal bonds without a thought of building equity in homes.

About 64% of people in the U.S are homeowners compared with about 89% of people in China and 87% in India. These numbers set me on my heels. Didn’t we invent middle-class home ownership and the American dream?

Like so many other changes in our lives, COVID-19 is the pandemic that keeps on giving. The effect on the real estate market is significant. Interest rates went up, making mortgages unappealing to buyers even if they could afford the higher rates. The lack of inventory discouraged them even more and the mobility of work and living arrangements played into the new world order we’re starting to see. Of course, the big losers here are the lower-income renters who are being hit with increases in rental fees and a lack of available properties to rent.

Entire single-family home rental subdivisions, build-to-rent, are being constructed, marketing to high-earning families and seniors. This is no longer a transition for people, it is a lifestyle choice and likely permanent. In the state of Florida, I found build-to-rent projects in both Charlotte and Lee counties, Jacksonville and Port St. Lucie. In 2022, 14,500 of these communities were constructed around the country. One report said there are now 44,700 under construction and another report by an online firm Yardi says that number is 84,459. Either way, we are seeing a significant trend.

None of this will be affecting Anna Maria Island, which always moves to its own drummer. However, the trend in lifestyle with fewer homeowners and more renters could change how home investors on the Island view their investments. You never know what will change the real estate market. Who could have predicted what has happened in the last three to four years?

I hate to sound like a senior citizen, which I am, who is stuck in a time capsule, but with Americans becoming more and more self-centered, the appeal of community and homeownership is being threatened. Wouldn’t Mom and Dad be shocked?

The heat is on

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

The U.S. Census Bureau has released its population statistics for the year 2022 to 2023. All I can say is the heat is on in the South.

The takeaway here is that Texas and Florida’s population grew by a much larger number than any other state in the country. By now, it’s commonly accepted that the COVID-19 pandemic changed the way people live and do their jobs. Remote work has allowed many in the home labor force to relocate to more affordable living with better weather and a sense of security and freedom. This defined the state of Florida before incoming COVID escapees pushed up property values, which are only now starting to stabilize.

So, let’s dig into the actual numbers of the top three on the U.S. Census Bureau’s list of states with the highest growth.

The population of Texas on July 1, 2022 was 30,029,848. The population on July 1, 2023, was 30,503,301, an increase of 473,453 or 1.6%.

Florida, coming in second, had a population on July 1, 2022 of 22,245,521, increasing to 22,610,726 on July 1, 2023, an increase of 365,205 or 1.6%, same as Texas.

Third on the list is North Carolina, which on July 1, 2022 had a population of 10,695,965 and on July 1, 2023 had a population of 10,835,491, a growth of 139,526 or 1.3%.

The five states with the highest populations are California, Texas, Florida, New York and Pennsylvania. However, only Texas and Florida are in the top 10 of growth between 2022 and 2023. The other three all lost population during the same timeframe, with California being the biggest loser of 2023. Remember that population growth or decline has everything to do with real estate values.

Another survey by Bankrate.com analyzes the hottest metro areas in the country. Here they are in order: Gainesville, Georgia; Knoxville, Tennessee; Cape Coral-Fort Myers, Florida; Northport-Sarasota-Bradenton, Florida and Charlotte, North Carolina.

The Sarasota metro area, which also appears on the Best Places to Live list, ranks second nationally in price appreciation and 12th in population growth, but 206th in active listings.

The Fort Myers metro area ranked fifth in price appreciation and eighth in population growth, also with a lack of available listings. They too appear on one of the best places to live lists. These two South Florida regions are closely linked, sharing the same quality of life appealing to people relocating to the Sunshine State.

Bankrate also analyzed the five hottest large metro areas, placing Tampa at number three and Orlando at number five. This, among other area studies, will explain why the South added 1.4 million residents, accounting for 87% of the nation’s growth this year according to the Census Bureau.

The Census Bureau’s numbers aren’t perfect. They include everyone living within the U.S. except short-term visitors, but the number of immigrants without legal status is difficult to accurately count. The estimates are based on birth and death certificates, IRS and Medicare records and the American Community Survey. In addition, the Census Bureau released projections showing that the population is expected to continue growing slowly to approximately 2080.

You may have a love/hate feeling about our increase in population. You love the influx because they keep the property values moving up, expand the tax base and are responsible for the many new shops and restaurants in the area. But it comes with the price of increased traffic, especially getting to our outstanding beaches.

If you’re still worried about property values, remember housing density increases the price of homes, and we’ve got the density, good or bad. What we don’t have is the snow.

Happy new real estate year

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

Despite homeownership being a pipe dream for many Americans, there is good news on the horizon. If you’re a first-time buyer and are still stuck on the sidelines, this may be the time to get started.

One-third of buyers in 2023 were first-time home buyers, below the historical average of 38%, according to the National Association of Realtors. In addition, the median age of first-time buyers was 35 years old. It is now less affordable than at any time in recent history to buy a home, and that isn’t changing any time soon – except for one interesting point.

When the Federal Reserve started raising rates aggressively two years ago to curb inflation, mortgage rates went up right along with all the other rates for borrowing money. Well, a funny thing happened on the way to 2024; rates started going down. The Federal Reserve stopped raising rates during the last several meetings, the stock market started going up and mortgage rates started heading to 7%. As of this writing, according to Forbes, the rate for a 30-year fixed rate mortgage was 7.26% and the rate for a 15-year fixed rate mortgage was 6.34%. Also, the Federal Reserve signaled it may cut interest rates next year and possibly have multiple rate cuts.

This may not help the housing shortage that has kept asking prices so high, but for those who can finally find a home, the carrying charges are starting to look more affordable, allowing more first-time buyers to qualify for financing. However, Gen Z and Millennials, the primary buyers of first-time homes, will continue to be facing a limited supply of single-family properties. This will put pressure on prices to stay elevated unless or until supply catches up.

Locally, there is more positive news. WalletHub.com, an online company that analyzes market trends, has placed Tampa as the best place to retire. In fact, their analysis places the five top best places to retire as Tampa, Scottsdale, Arizona, Fort Lauderdale, Orlando and Miami, four out of the top five in the state of Florida.

Just to be fair, U.S. News & World Report placed Tampa as #4 in their analysis as the best place to retire, moving up from #6. Both surveys are based on affordability, quality of life and health care.

And very close to home, imagine my surprise when about a month ago I opened the second page of the Wall Street Journal and found Cortez, Florida as the dateline in a good size news story.

The story was about the Hunters Point new construction on Cortez Road just east of the Cortez Bridge. Hunters Point single-family homes are all energy-efficient homes, explained by the developer as the first “net zero” single-family home development in the country. This means that the homes generate at least as much energy as they consume.

The homes have solar panels and a battery system to keep the power on even if the power grid experiences outages. They are also built with flood vents to accommodate rising water and living space that is about 16 feet above sea level. Hunters Point’s goal is to fight both the cause of climate change and carbon emissions while protecting their properties during major storm events.

It looks like little Cortez made the big time, and you can too if you start the new year with an optimistic outlook. In the words of Mark Twain, “The secret of getting ahead is getting started.” Happy New Year!

Will there be home stability in the New Year?

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

It’s a whole year later and we’re still talking about interest rates and low inventory – will it ever end? The sellers are still happy with their values, the buyers are still dismayed with the lack of inventory and it’s not likely things will change much in the new year.

The most recent conversation among real estate analysts is that even though interest rates have dropped slightly, it will make homes more affordable but not affordable enough since the shortage of available properties to purchase is not expanding at the national level.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the nation, rose 3.9% from a year earlier in September compared with a 2.5% annual increase the prior month. September was the highest since the index began in 1987. In addition, according to the National Association of Realtors, the median existing home sale price rose 3.4% in October from a year earlier to $391,800.

So, what is the outlook for the new year? Some analysts feel home prices are feeling the burden of high mortgage rates, which will slow the rate of price growth in the new year. Others agree and think it might be that home prices are going to tread water for a number of years until the economy gets in balance with higher incomes and lower rates.

One nice change for those buyers out there is the increase in the maximum size of home mortgage loans eligible for backing by Fannie Mae and Freddie Mac, which represent the majority of home mortgages. In expensive markets like Hawaii, California and New York, the increase will be a maximum of $1,149,825 from $1,089,300 and for less expensive markets, the cap would rise to $766,550 from $726,200. The increases are set by a legal formula and could make it easier and more affordable for some borrowers, especially in the high-end markets.

Let’s take a look at Manatee County’s November sales statistics reported by the Realtor Association of Sarasota and Manatee.

Single-family homes closed 22.2% more properties compared to last November. The median sale price was $485,861, down 4.1%, and the average sale price was $662,237, up 4%. The median time to sale was 82 days compared to 77 days last year.

Condo sales were up 20.7% compared to last November. The median sale price was $351,500, down 1.8%, and the average sale price was $393,475, up 0.6%. The median time to sale was 83 days compared to 56 days last year.

The month’s supply of available properties for both single-family and condos were up. Single-family properties had a 3.4 month’s supply, up 13.3% from last November and condos had a 4.4 month’s supply, up 63% from last November.

Overall demand is strong for both Manatee and Sarasota counties. With inventories in both counties continuing to increase, we can assume sales will be strong over the winter months when visitors and part-time residents return in force.

The stability of the real estate market really depends on the stability of countrywide and even worldwide economies. And don’t discount the emotional impact of wars and unrest as well. Fortunately, Florida is still a hot market that doesn’t look like it’s cooling off any time soon. We’re going into the busy buying and selling season, which will be the real barometer of how successful our market is.

Happy New Year and much joy and love in 2024.

It’s a wonderful Island

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

Although most Americans didn’t realize it then, the holiday season of 1946 was the opening bell of some of the most prosperous decades in our history. World War II had just ended, and men and women were coming home from overseas and starting new lives, which also included new homes.

The postwar housing boom created 40 million new homes starting in 1946. New suburban communities sprouted up all over the country but particularly adjacent to major cities where returning soldiers were filling jobs in a suddenly booming economy. Florida, of course, didn’t enjoy the same level of building as the Northeast and West Coast did, but starting after the war there was a steady increase in population that still hasn’t slowed down.

What happened in 1946 was the beginning of the suburban lifestyle. Americans for the first time had the choice of living in a single-family home and commuting to their jobs in the city. It was a way of life that mostly continued until COVID-19 locked everyone in their homes and on their computers. This once-in-a-century phenomenon pushed property values and the desire to own a home through the roof, which has substantially benefited Florida.

If you don’t pore over Manatee County listings like I do, take a few minutes to review the Realtor.com website. The website can be sorted by zip codes and if you start with the highest price properties you may be shocked. Here’s an overview, just to give you an idea as of this writing.

The city of Anna Maria has 79 listings. The highest price is $12 million and the lowest is $1.15 million. Less than half of the properties are under $3 million.

The combined cities of Holmes Beach and Bradenton Beach have 214 properties listed. The highest price is $10,950,000 and the lowest is $510,000. A little less than 25% of the properties are above $3 million.

All of Anna Maria Island has ongoing new construction of large homes with multi-million-dollar price tags. These properties have drastically changed the price point of properties on the Island, as you can see from the above.

Cortez has 19 properties listed starting at $3,750,000 and ending at $695,000. Out of the 19 listings, 12 are over $1 million. The construction of the new Hunters Point development on Cortez Road has also changed the price point of Cortez properties, listing new construction townhomes at just under $2 million.

If you are dazzled by the numbers, here’s a reason to step back in time. Another major event happening in 1946 was the release of the iconic holiday movie, “It’s A Wonderful Life.” This black and white film has been playing every year for 77 years and will undoubtedly go on forever. It’s a classic story about good and evil and the important things in life that rang true in 1946 as they continue to do today.

One of my favorite parts of the movie is when new homes are built for needy families in the town. James Stewart and Donna Reed present the keys to the new owners along with these gifts and an accompanying poem: “Bread that this house may never know hunger, salt that life may always have flavor and wine that joy and prosperity may reign forever.”

Wishing you a peaceful and happy holiday surrounded by friends and family in one of the world’s most beautiful places to live. Enjoy the food and the wine, and ring the bells because “Whenever you hear a bell ring, an angel gets its wings.” Happy holidays!

Working in paradise

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

This may seem redundant, but Anna Maria Island is an island and, like every island in the world, it’s surrounded by water. There are two bridges to the Island from Bradenton, one north and one south, and the traffic approaching these two bridges backs up consistently. Oh, by the way, the bridges are drawbridges that open every half hour, and one of them is slated to be torn down sometime in 2025, maybe, and will be replaced with a fixed-span bridge.

Now that I’ve told you something that you already know, what’s my point? My point is what do the individuals who work on the Island but don’t live there experience daily? I think a lot about this from time to time, since I too worked in Anna Maria for many years, and frequently felt like I was back in midtown Manhattan.

The success of Anna Maria Island is the envy of many coastal towns in the country. Our real estate values are sky-high and construction is on practically every street. The vacation rental market has sapped the life out of any long-term rental properties to turn them into weekly and sometimes daily rentals, leaving very little to choose from for just regular residents who need to rent rather than buy.

Many of these displaced renters are individuals who work in the Island’s restaurants, hotels and rental properties. One of the ongoing effects of the COVID-19 pandemic is not only the surge in real estate prices and the abundance of new visitors to the Island, but also the many service employees who never came back to the workforce when restaurants finally opened and visitors started returning. About a month ago, I read a fascinating story in the Wall Street Journal’s Mansion section about two high-end vacation locations that are enjoying the same success as Anna Maria Island and facing the same problems.

Those towns are Nantucket Island, Massachusetts and Vail, Colorado. Although entirely different geographically, they share the same issue of finding local people to work in restaurants, resorts and multi-million-dollar properties. I’ll start with Nantucket, since that’s a place I’m very familiar with. There is only one way to get to Nantucket and that’s by boat. The ferry from Cape Cod takes two hours or a bit less for the fast ferry, which, of course, costs more. If you’re in no hurry, it’s a lovely ocean voyage that can be subjected to frequent weather delays. In 1983, Nantucket established a land bank, buying up available property to promote conservation and recreation. This, of course, impacted the amount of buildable land.

Vail may not be surrounded by water but it’s still a substantial drive to the charming village to work for the day. Vail’s local government has built some housing restricted to local full-time residents, but it doesn’t totally solve their problem. They may as well be on an island.

Getting back to Anna Maria Island, without a land bank or resident-only rentals, the responsibility is totally on service employees and their employers. There is that new ferry that is starting service from downtown Bradenton to the Island, but it’s not planned to be available daily and will probably be mostly for tourists and day trippers with some future dispensations for Island workers.

Maybe there is still a way to mitigate the shortage of help. Certainly, including the problem in conversations about consolidation of the three cities could be a first step. The result of doing nothing will be higher prices for residents and visitors to the Island and, although I dislike saying this, declining real estate values.

Is owning a home still the American dream?

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

Last week we talked about first-time buyers who are taking a pause in their house hunting and redirecting their savings. But is this the new permanent reality in a country that includes homeownership as part of the American dream?

According to a new Wall Street Journal/NORC survey, only 36% of voters in the new survey said the American dream still holds. When this same question was asked last year by the Wall Street Journal poll, 68% said yes, almost twice the share of the new poll. In addition, half of voters in the new poll said life in America is worse than it was 50 years ago compared with 30% who said it had gotten better. But the scary outcome of this survey is that among all respondents, 18% said the American dream never held, a very sad statistic.

As reported last week as well, the National Association of Realtor’s October sales statistics fell 14.6% from last year. Manatee County’s sales of single-family homes also fell by 12.8%. This reflects the ongoing low inventory available to buy and higher interest rates. Who could blame young people when they say the American dream doesn’t exist when one of the major components of that dream is the ability to purchase homes?

Even though according to recent data inflation has eased, there is still a disconnect in the way Americans perceive the economy. Since ownership of housing isn’t measured by the Bureau of Labor statistics, the increasing cost of purchasing a home isn’t reflected in the inflation rate, however, not being able to purchase a home matters more than the price of gas or food to home buyers. Since January 2021 home prices have risen 29%, according to the Case-Schiller national home price index. In addition, mortgage rates have nearly tripled.

If you already own a house and have no reason to move, you might not care or be affected by lower sales numbers and higher interest rates. Many long-term homeowners with low mortgage rates are sitting back and enjoying seeing their equity going up, which it has consistently for the most part.

Homeownership is still viewed as achieving the American dream, as remote as it may seem to first-time buyers in this market. So far, this hasn’t lowered homeownership rates, which are higher among almost all age groups than before the pandemic, according to the Census Bureau. That could, however, change if the unaffordability of housing remains high. Mortgage rates have dropped with the easing of inflation, but they are still historically high. The consensus is that home prices will likely not fall in 2024 but level off somewhat. Since so much depends on that assumption it’s almost impossible to know what’s down the road next year.

Since I was a full-grown adult 50 years ago owning my own home, I tend to agree that at least the economic life of people now is worse than 50 years ago. That doesn’t, however, mean that all life is worse. Certainly, medical progress is better, education is more available and better, and women and minorities have more opportunities, not to mention technology, which has made all our lives better.

I believe the housing market will eventually normalize and all the first-time buyers who are booking exotic vacations will start buying again. It’s nice to have wealth, but we shouldn’t measure our happiness by it when so many other things in life are more important.

Enjoy life or keep waiting

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

What would you do if you had a bunch of savings and the thing you were saving for is unavailable? A lot of first-time home buyers in the country are faced with that exact problem but they’re not all making the same decisions.

The housing market nationally is not performing the way housing markets typically do. The price of housing ordinarily goes down when mortgage rates increase, but as we all know, housing values are still going up primarily because of a lack of inventory.

According to the National Association of Realtors, the sale of existing homes was down 14.6% year-over-year in October with home prices still high. This is arguably one of the worst times to buy instead of rent and many first-time buyers are postponing their weekend house-hunting expeditions in favor of enjoying life.

The worst part about this is that the deferment of house hunting is not just for a few months to see what happens with the mortgage rate or the number of homes on the market, but some buyers are talking years before they try again. So, what are these frustrated buyers doing with their inflated bank accounts? Being the Americans that we are, some of them are taking expensive vacations, others are renovating their existing homes and decorations and the more practical are increasing college funds or retirement funds.

The “we want to buy a house but can’t” savers are turning into consumers, completely setting the economists – who a year ago predicted a recession – on their heads. With oodles of cash available and the likelihood of missing the boat on building equity, they are spending on enjoying themselves, keeping the economy in positive territory. Who could blame them; fiddling with interest rates never has a good outcome.

Time to look at October Manatee County sales statistics reported by the Realtor Association of Sarasota and Manatee and see what’s going on locally:

Single-family homes closed 6.5% more this year compared to last. The median sale price was $479,000, down 12.8%, and the average sale price was $658,503, down 7.4%. The median time to contract was 29 days compared to 24 days last year and new listings were up 24.5%, bringing the month’s supply of available properties to 3.3 months compared to 2.8 last year.

Condos closed 7.5% more this year compared to last. The median sale price was $370,000, up 0.4%, and the average sale price was $415,591, up 7.1%. The median time to contract was 30 days compared to 22 days last year and new listings were up 28.3%, bringing the month’s supply of available properties to 3.8 months compared to 2.3 last year.

Lower sale prices for single-family properties may not look like a good thing, but since real estate numbers are always lagging, this could reflect the rapid increase in interest rates. The really good news aside from the increase in closings is the increase in inventory. Per the Association of Realtors, this is pointing to a more balanced future market, hopefully more like pre-pandemic activity.

Those of you who are not first-time buyers but buyers who would like to move up but don’t want to give up your ultra-low mortgage rate should have a little more respect for your mortgage. It’s hard to think of money you owe as an asset but if you have a fixed-rate mortgage below or around 3% you are sitting on a valuable asset. You may not see the asset in the bank, but you are wealthier for having it.

I’m of the school that you should always enjoy life but still find a way to balance that with improving your finances. All of this will return to normal someday, so don’t blow it all on a trip to Tibet to see the Dalai Lama.

Rent, buy or add on?

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

Confused? Of course you are, if you’re a potential buyer. We are living through a very dysfunctional housing market and the maze doesn’t look like it’s ending any time soon. Should you buy, should you rent or should you find a tiny accessory home? The answer is different for everyone.

Buying has almost always been favored over renting when it comes to housing. For some, renting is considered “throwing money away” while buying is an “invest­ment.” The truth is the answer is much more nuanced and really depends on what is the right fit for you.

Renting is a short-term solution as opposed to homeownership, which is much more of a commitment in terms of finances, time and labor than renting. Nevertheless, the argument for home ownership has always been building equity and doing as you please with your property.

In today’s real estate world, home­ownership is very elusive to first-time buyers. Inventory is in short supply, interest rates are rising and particularly in Florida, insurance is totally unpre­dictable from one renewal to the next. Right now, the cost of buying a home versus renting one is at the most extreme since at least 1996. The average monthly new mortgage payment is 52% higher than the average apartment rent, according to CBRE, a global commercial real estate services company.

A person buying a home today will pay 60% more for monthly repayment costs than if they had bought the same house three years ago. As a compari­son, rents rose by 22% over the same period, a little ahead of the inflation rate but far below the cost of purchas­ing on a monthly basis.

If the home you’re considering buying is a long-term investment and you can scrape up the monthly costs with a little extra for inevitable repairs, then in the long run you’re better off. But this decision is an individual one based on job security, family needs and the desire to grow equity.

Trying to fill the lack of the affordable property gap are tiny homes or ADUs (accessory dwelling units). These are typically small apartments tucked away in the backyard, over garages or extended out from the main house. They are getting a second look from buyers who are build­ing, and contractors are providing options for these units as part of new construction. This is a growing trend to keep an eye on.

Finally, I feel that in the best interest of homebuyers, I must mention this last item. Realtors – specifically The National Association of Realtors (NAR) – are facing two federal antitrust trials relative to com­missions charged. Realtor commissions are typically 6% shared between the listing and the selling agents, creating a potential conflict of interest. Keep in mind this is not set in stone and sellers can ask for a lower rate before they enter into a listing contract.

The first of these two antitrust cases was decided by a jury against the NAR on Oct. 31. The decision will be appealed, and it could take years before there is any final conclusion. The second case has not gone to trial yet, but we can assume there will be more antitrust cases going forward.

This ruling and others that may be com­ing can possibly change the way business is done in the real estate community. I know how hard most real estate profes­sionals work and how much experience they offer their clients; therefore, I’m staying neutral.

Well, if you were confused before, I just made it a little more confusing. However, renting or buying should not be confusing, it should be well thought out before moving forward.