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Tag: Castles in the Sand

What investors are eyeing now

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

The old expression “follow the money” can be applied to several different as­pects of life. Sometimes it’s as simple as tracking trades in the stock market and sometimes following the money can disclose corruption in government at all levels. But for the sake of this column, we’ll follow the real estate money – and it’s taking a new, surprising turn.

As we briefly discussed last week, the housing market, with some exceptions, is slow all over the country. The much-anticipated spring selling season has become a complete dud and everyone in the industry is pinning their hopes on a large interest rate cut in September.

Nevertheless, single-home investors are alive and well and are dominating the real estate market so far this year. The interesting thing is the profile of investors has changed significantly. Previously, investment buyers were predominantly large private equity firms, however, the majority of buyers for these properties now are small investors; small investors are defined as owners with 100 or fewer properties.

According to Cotality, a property analytics firm, so far in 2025, investors have made up about 30% of purchases of both existing and newly built single-family homes, the highest share on record. In addition, in the first half of the year, small investors made up about 25% of investment home purchases, while large investors accounted for about 5%.

The question is, why is this happening? Obviously, small investors are not deterred in spite of high prices and high interest rates; they still see a pathway to maximize their investment. Smaller investors also have the ability to take more risk since they are making their own decisions without the oversight of a board of directors. It also works for them since so many traditional homebuyers have stepped back waiting for some signal that the market is improving.

Based on what is going on with the condo market across the country, some of those investment buyers would be smart to take a look at advantageous buying options on condo properties. Condo sellers haven’t faced a market this weak in more than a decade. Prices are down, supply is up and sellers often feel lucky to get an offer.

This is particularly true in the south and naturally, Florida condos – which play a major role in our housing market – are being impacted the most. The Florida condo market accounts for 16% of all home sales compared with just 10% of home sales nationwide. Coastal condos, as we know, are hurting the most as home insurance and new safety regulations have increased HOA fees.

All of this is true and there is no denying it. However, although I don’t have statistics to prove my theory, I do believe the east coast of Florida is suffering more with condo sales than the west coast. This, I believe, is a reflection of the Surfside build­ing collapse in 2021 and also the age of the buildings and the deferred maintenance on so many of the oceanfront properties. I hear much less about condos in our area failing the milestone structural inspections mandated by the state and ones that have appeared to be on a smaller scale.

Even though single-family homes are selling at a stronger pace than condos, remember, Florida loves condo living – it’s why people came here. Certainly, marketing a strong, storm-survived condo building will be beneficial to your sale and of course should be on your listing information.

Follow the money, and the money is with small investors. Watch what they’re buying and keep an eye on those condos.

The property closing dance

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

There are all kinds of issues that can arise between signing a contract for sale and the actual closing. Realtors always say don’t spend your commis­sion ‘til the check is in your hand, and that is good advice.

The first thing as both a seller and buyer you should do if the buyer has a mortgage contingency is to get a full prequalification of the buyer’s financial position and their ability to get a mortgage. The next stumbling block is the property appraising, again if there is a mortgage contingency. Lenders will not loan money for a property that does not have the value that was agreed upon between the buyer and seller. If this happens, a compromise can be reached by the buyer upping their down payment or the seller reducing the price of the home.

The dreaded home inspection applies to all sales and is where everyone in the transaction holds their breath. Licensed inspectors are checking primarily for structural damage to the property, wood destroying organisms and mold. In addition, home inspectors also check systems including septic, electrical, plumbing, heating and air conditioning and appliances. Frequently issues that come up in a home inspection are the result of deferred maintenance.

Usually, an agreement can be made be­tween buyer and seller to either repair the defect or to give the buyer the funds to do the repairs. However, if an agreement can’t be reached, the transaction is canceled and the parties go their separate ways. It’s not uncommon for sellers to obtain their own home inspection at the time the property is placed on the market as an enhanced marketing tool and a heads up for sellers if there are potential problems.

The final step prior to closing is purchasing title insurance. There are two types of policies: One is the owner’s policy, which protects the owner if there are any future title issues, and the other is the lender’s policy protecting the lender, required if you are getting a mortgage. The premium for title insurance is a one-time fee issued only after the title company has conducted a search of the public records and cleared the title for any liens or restrictions that would affect ownership.

After you’ve finished the closing dance, the closing paperwork will be concluded, the deed recorded and the new owner usually walks away with the keys to the property and takes possession immedi­ately. Like every aspect of a property sale, it sounds more complicated than it is. There are a variety of professionals along the way to help and advise you, and the majority of the time everything goes smoothly.

A final note about the national sales statistics for June reported by the National Association of Realtors. The number of properties sold were at a nine-month low, completely decimating the spring sales season. However, sale prices rose to $435,300, a record in data going back to 1999. As a comparison, Manatee County single-family home median home sale price for June was $440,000, down 15.2% from last June.

With the home prices high and interest rates not moving, buyers are sitting back and not making purchasing decisions. The one glimmer of hope is a possible rate cut in September at the Federal Reserve’s next meeting.

Meanwhile, if you are fortunate enough to be in contract on a property, be aware of all the pitfalls that can creep up before you get to the closing table. And if you’re not, chill out at the beach.

Why aren’t we a boomtown?

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

Looking for a boomtown? Then look in the South. Eight of the top 10 U.S. metro areas ranking as boomtowns are in the South; five are in Florida. But there’s not one in Manatee or Sarasota counties or in Tampa – how could that be?

Let’s start with how LendingTree, which determined what a boomtown is, came up with its conclusion. They grouped 100 of the largest metros across eight unique metrics grouped into three categories – people and housing, work and earnings and business and economy.

So if you live in one of the metros that has a lot of housing available but not a lot of earnings, you’ll lose points. Same with employment; if you live in a metro where the workforce is increasing or the annual GDP (Gross Domestic Product) is increas­ing, you’ll get an increase in points.

Since Manatee, Sarasota and Tampa had their big surge during COVID, that is probably the reason why those metros didn’t make the top 10. We may still be ahead of the growing metros in all of the categories analyzed in numbers and dollars, but we’ve obviously leveled off.

The analysis points out that the three largest U.S. metros, New York, Los Angeles and Chicago, ranked 89th, 84th and 94th respectively out of the top 100. It doesn’t mean that New York real estate is declining or that the restaurants are reducing their menu prices and no one is opening a business, it just means that those segments of the economy have leveled off and aren’t growing as fast as other smaller metros.

These are the rankings of the top 10 boomtowns around the country starting with number one: Austin, Texas; Orlando, Florida; North Port, Florida; Nashville, Tennessee; Cape Coral, Florida; Colorado Springs, Colorado; Charleston, South Carolina; Lakeland, Florida; Deltona, Florida; and Denver, Colorado.

Austin also came in number one in LendingTree’s last boomtown survey because of GDP growth and one of the highest increases in housing units. Orlando and North Port, Florida ranked second and third basically for the same increase in GDP and housing units.

On to the June sales statistics published by the Realtor Association of Sarasota and Manatee:

Single-family homes closed 3.2% fewer properties compared to last June. The median sale price was $440,000, down 15.2%, and the average sale price was $583,447, down 20.8%. The median time to contract was 56 days compared to 57 days last year and new listings increased by 2.9%. The month’s supply of properties was 5.2 months compared to 4 months last year.

Condos closed 5.3% fewer properties compared to June of last year. The median sale price was $312,900, down 9.2% and the average sale price was $333,877, down 19.8%. The median time to contract was 68 days compared to 73 last year and new listings were up 5.3%. The month’s supply of available properties was 7.4 months compared to 5.8 months last year. A 6-month supply of available properties is always considered a normal market.

Interestingly, cash sales are down in both sectors 18.1% for single-family and 7.7% for condos.

I have a gut feeling that all potential buyers and sellers in Manatee County are holding their breath waiting to get on the other side of hurricane season, hopefully in one piece before any decisions are made.

So what’s the draw of the South that keeps people moving here? The top of the list is more affordable housing, lower cost of living and more job opportunities. We’re also seeing a chain reaction; the more friends and family move South, others follow. I’m bullish on the continued growth of the South and you should be too. You don’t have to live in a boomtown to know you’re better off.

Disasters may have silver lining

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

Last week we talked about the future restoration and look of Cortez after the storms and after the county’s purchase of the Seafood Shack property. This week we’ll cover an emerging trend in the country where communities that have been struck by a disaster are frequently rebuilding richer and more exclusive – sound familiar?

Natural disasters can be galvanizing for a community where people come together to help neighbors and share information about contractors, painters, debris removal and just about anything else. It also presents an opportunity for developers and investors to swoop in and leave their mark on the area.

Homeowners who have received government aid and insurance payouts are rebuilding sturdier homes and meeting updated building codes. In addition to adding another layer of storm protection in the rebuilt homes, homeowners also have the opportunity to remodel damaged areas. This will ultimately translate into a more valuable and marketable property.

Unfortunately, there are low-income homeowners who have more problems navigating the bureaucratic procedures to file for disaster aid and may not have personal funds to close the gap until the funds are available. Also, on Anna Maria Island, longtime residents with beachfront property handed down through families frequently did not carry homeowner’s insurance since the premiums were higher than the value of the building. Many of these cottages and older one-level homes have been sold to developers for the land value. Renters of course can get evicted or choose to move from damaged properties and are facing higher costs and a short supply of rentals.

What this means for Anna Maria Island and Cortez is a change in the profile of the communities. The slow pace of living in these communities is changing, replacing an Old Florida vibe with a jazzier vibe and new, larger homes capable of entertaining family get-togethers and weddings.

Many of these properties are owned by investors or investor groups and are designed for renting and although Anna Maria always had many properties that were available for rent, it still maintained the quality of Island life. Many islanders now fear the Island will never be the same.

A good example of how a Category 5 storm changed a community in Florida is Hurricane Michael, which hit the Pan­handle in 2018. Panama City had an older, slightly tattered downtown area which has been restored with trendy restaurants and boutiques and an increasing popula­tion. Brokers specializing in waterfront properties say wealthy buyers are arriving in growing numbers, raising the economy and value of properties considerably.

While we were talking hurricanes, which I swore I wouldn’t do, I found some interesting statistics from the FSU Florida Climate Center. Starting with the Great Mi­ami Hurricane in 1926 through Milton in 2024, there have only been three Category 5 hurricanes, nine Category 4 hurricanes and 10 Category 3 hurricanes. Don’t get too comfortable with these numbers since the one-two punch of Helene, a Category 4, and Milton, a Category 3, did an incredible amount of damage prior to making landfall compounded with a 4-foot storm surge.

Nevertheless, populations have increased in three of the most severely hit Florida communities. Andrew in Miami was a Category 5, Charley in Charlotte County was a Category 4 and Ian in Lee County was a Category 4 – all increased their populations substantially within a three-year period after the storm.

I’m standing by my prediction from last week about the value of properties in Cortez. I also believe that Anna Maria Island will enjoy an increase in property values as well. You may not like the new vibe, but you may really enjoy the increasing trends in value.

Look to the future

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

Time to talk about Cortez again in view of the monumental changes being made on the Cortez peninsula and, by extension, within the fishing village. The changes will affect all Cortez residents and many residents of Manatee County as well, and likely some of it you won’t agree with.
You would never know it now if you took a ride down 127th Street past the former Seafood Shack Restaurant site, but the property owned by Manatee County is slated for a major overhaul. As a matter of fact, you can’t even access 127th Street from Cortez Road since the county is working on infrastructure for the new Cortez Bridge scheduled to start construction late 2025 or early 2026, also a big change.
At this moment, the Seafood Shack property is tentatively being renamed the future Cortez Marina. Plans for the best use of this property are still being worked on and the county commissioners are looking for input from residents. At a meeting held in Bradenton Beach on June 12, with residents from the peninsula, there were a lot of opinions. Mostly homeowners were concerned about traffic flow and boats on trailers accessing narrow roads on their way to a planned boat launch area. If you’re concerned about how the property is being developed – whether you live in Cortez or not – you should make your voice heard. Don’t wait for another meeting; you can email the commissioners, whose contact information is on the Manatee County website.
In addition to boat ramps and parking for boat trailers it is suggested that the site could be a landing area for a water taxi and possibly the Gulf Islands Ferry with vehicle parking provided for that purpose. Also discussed was a restaurant and hopefully some retail space, both of which would be a bonus to the community.
Will these changes give new life to the 8 acres? I believe it will, even though not everyone will be happy with the county’s plans. Some other positives are a fixed high-level new bridge to the Island with some pedestrian- and bike-friendly areas, providing quick access from the Island in the event of storms as well as access to the charm and seafood restaurants of one of the few remaining authentic fishing villages in Florida. Add to this a new active boating area on some of the best boating waters on the west coast of Florida and hopefully you will see a facility that will be a draw for more than just the boating community.
What, if anything, does this mean for real estate values in Cortez? There’s no surprise that values are down and available listings are more than available buyers. However, if you are a home or condo buyer considering waterfront and water access property, I would give Cortez a serious look. We’re in a buyer’s market and Cortez is not immune to that so it can be a very advantageous time to buy. Primarily I keep thinking about how things will look in a couple of years after everything is rebuilt and spanking new for an underused 8 acres of prime land. Property values can only go up in an area with spectacular water views and convenient water access.
Ask yourself why did you come to Florida in the first place? Was it to live in a master planned community or to live in a vibrant varied community on the water, where the dolphins are jumping every day? I’m optimistic for the first time since October. I believe little Cortez will come back better than ever and more valuable. Look to the future – not the past.

There are bridges and there are bridges

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

There are a lot of bridges on the coastline of Florida. They serve as an important function to transport vehicles and people to our beautiful beaches and restaurants. However, there is another type of bridge which also serves an important function – a bridge loan.

Bridge loans are short-term loans that can be used to bridge the gap between buying a new home and selling your previ­ous home. For example, you found the home of your dreams, but you need the equity in your current home for the down payment and closing costs in order to go forward and close on your new home.

Bridge loans can be acquired in less time than mortgage loans but aren’t offered by banks or credit unions, they’re usually only offered by specialized lenders

Bridge loans can often be available within 72 hours, as opposed to mortgage loans, which can take 30 to 45 days for approval. They run from six months to three years with a variety of repayment arrangements. You can have a monthly payment, interest-only payment or end with a balloon payment. Bridge loans are also used for investment property when the property is purchased, renovated and flipped or resold for a profit.

Qualifying for a bridge loan is similar to qualifying for a conventional home mortgage. Lenders will check your debt-to-income ratio, the amount of equity in your current home, credit score and income. Having a large percentage of equity and a high credit score are essential to getting approved.

Having an approved bridge loan could make your offer more competitive since there will not be any further mortgage contingencies, practically a guarantee to a seller. It’s also faster than a conventional mortgage, which could be attractive to a seller as well.

The flip side of bridge loans are the higher interest rates, which are beneficial to the lender for short-term loans. Re­member, the higher interest rates and fees are out of pocket money, so be prepared with some extra cash. In addition, you are essentially paying two mortgage fees until you sell your property and are able to close out the bridge loan.

If a bridge loan sounds too risky or you’re worried about qualifying, there are two other ways to pull the equity out of your home. Cash out refinance allows you to borrow against the existing equity in your home by taking out a new mortgage in excess of what you need to close on the new property. Home equity line of credit (HELOC) also lets you borrow against the available equity in your home. Most lenders will also limit the amount you can borrow to 80% of your home’s appraised value. Either way you still need adequate equity in your current home to move forward.

Applying for a bridge loan may be beneficial depending on your financial situation and where you are in the buying and selling process. But make sure to weigh your options and consider alterna­tives like cash out refinance and home equity loans.

Bridge loans are challenging and should be undertaken only by buyers who are fairly confident they can sell their current residence and have the funds to make the bridge loan payments until such time as it can be closed. It’s also important that you have the personality that will sustain the stress that this financial endeavor will likely create. If not, stick to the physical bridges in and around Anna Maria Island; they don’t cost a penny and the views are spectacular.

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.

Time to consider downsizing your home

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

Sometimes it’s just time for a change, and that change can take a lot of different forms – breaking off toxic relationships, getting a new vehicle that isn’t a BMW or Mercedes, or downsizing your living space. We as Americans like space, but enough is enough; we all don’t need to live in 4,000 square feet and most of us can’t afford it, but there are alternatives.

You may not believe it while driving around Anna Maria Island and seeing all the mega-homes being built, but in many regions of the country, including Florida, would-be homeowners are realigning their priorities. Because of high prices, high mortgage rates and a lack of supply, buyers are making concessions and the concession that makes the biggest dent in the cost of a home is size.

Builders are finding that smaller homes are attractive to buyers because they not only cost less to purchase but also reduce the cost to run a home. Heating, air conditioning and even the amount of furniture and accessories you need in a home is reduced.

Resales of single-family homes are also benefiting from the size of a property. Buyers are more willing to sacrifice size if it means finding a home that works within their budget. Even townhomes and semi-attached structures are having a comeback, offering less square footage, a two-car garage and frequently a small yard.

Bottom-line buyers – especially first-time buyers – are getting tired of waiting for interest rates to go down, impacting the amount of home they can afford, and have decided they can be just as happy living in 1,500 square feet as living in 2,000 square feet. The average size of a home has decreased year over year in each quarter since 2022 in the country.

Because of several disasters around the country where owners have lost their homes in the last several years, alternative methods of construction are stepping in. California, Hawaii, Florida and the Carolinas have experienced wildfires, flooding and hurricanes resulting in the loss of homes. Homeowners who have lost a home are finding out that their insurance coverage is not covering the cost to rebuild their home so they’re thinking outside the box and so are businesses.

Modular and prefabricated homes have been around for a long time but are starting to gain favor again. No longer do they have a “trailer” look; instead, they can closely have the same look and feel as the previous home. The homes are built in factories then assembled onsite, saving owners hundreds of thousands in construction costs and deliver­ing the finished production in half the time.

A version of modular homes was offered by Sears Roebuck as kit homes between 1908 and 1942. The pre-cut kit was shipped to customers who either assembled the house themselves or hired a builder to do it. There were 75,000 kit homes sold during this period. I know of one on Pine Avenue but I’m sure there were others on the Island and I had a friend who lived in one on Long Island. Sears was way ahead of the curve when they created the kit house, and they were trailblazers when it came to online merchandising.

Finally, if you really want to have your mind blown, check out companies that use modular construction with 3-D printing. Giant 3-D printers squeeze layers of concrete into the framing for a future home and like magic, the frame of the house is done – no hammers and nails required.

If the future is smaller homes, I’m all for it. Who needs all those bathrooms to clean and guestrooms you may or may not use? But then, my priorities changed several years ago when I sold the BMW – best move I ever made.

Challenges of selling condos

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

Florida is condo heaven. If you’re interested in condo living, Florida offers condos in all price ranges, in all locations and with a variety of amenities and floor plans. The condo selling challenges we’re facing in Florida is both a good and bad thing.

The bad thing is that condo associa­tions are now being held to a standard of disclosure that they previously never had to prove. Many associations now have to pass milestone structural inspections by a qualified contractor and inspector. They need to disclose their financial position and disclose adequate funds in their reserves to meet future necessary repairs.

This is also a good thing. Knowing an association is structurally sound and that it has adequate funding for the future can make units more attractive to potential buyers. Buyers will likely not get scared off by associations that can prove their structural integrity and financial soundness.

In addition, special assessments have become the boogie man of condos in recent years. Some of these assessments have to do with the age of the buildings or repairs mandated by the state, as well as the fact that previous boards neglected to fully fund their reserves. Other assess­ments are for unplanned expenses like storm repairs and increases in insurance.

The best way to handle special assessments that have already been voted on by the condo board or even one that may come up in the near future is to be fully transparent. Hiding the fact that special assessments are looming will not only discredit sellers but will send buyers running. There are no mandates dictating who pays for special assessments. However, sellers need to be prepared to cover any special assess­ments already voted on and leave future assessments as a negotiating point. The idea is to make buyers feel comfortable with their investment.

The Florida condo market is taking a hit on all sides. The median price of a condo in the state was down 9% in April from a year earlier compared to the single-family home market, which had a 3% drop in April per Redfin.

That said, in my opinion, the condo market will return once the state struc­tural mandates are fulfilled and reserves are replenished. Buyers love condo living and, remember, owning a single-family home does not relieve you of repairs, structural expenses and increased insurance costs. The difference is you’re not spreading out the financial shortfall with 50 or 100 other owners, it’s all on you. If you add up dollar to dollar what the cost of single-family homeownership is compared to paying condo HOA fees, you will be surprised how close they are.

Whether you’re selling a condo or single-family home now, more than ever you need to be transparent and disclose everything and anything about the property. This includes any facts or conditions about the property that may have a substantial impact on the value or desirability of the property that may not be visibly obvious.

Any potential claims, court proceed­ings and – as discussed – pending special assessments all need to be disclosed. Disclosure can be in the form of a written disclosure form or a verbal disclosure. I strongly encourage everyone to disclose on one of the disclosure forms available as an additional measure of transpar­ency. You’ll be happy to know that you are not required to disclose if a homicide, suicide or death took place on the property and if in your view the property is haunted, crazy as that sounds.

Like any real estate investment, condos can be good or bad, and like any prop­erty, pricing competitively to the market is the most important thing followed closely by transparency.

Are you tired of homeownership?

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

Everyone who has owned prop­erty – whether it’s a condo or a single-family home or investment property – has had those days when you have no idea why you’re doing this. Isn’t renting easier, less stressful and maybe even less expensive? Well, if you ever thought about renting, you’re probably thinking about it more after last year’s hurricane season. But not so fast.

Renting rather than owning has its own set of positive and negative attributes. Rent­ing gives you the flexibility to move, change jobs or get out of bad weather. Renting is usually less expensive with upfront costs, certainly far below a house downpayment. There is less responsibility relative to main­tenance; usually, landlords make repairs and replace mechanical malfunctions, a fixed payment at least for the term of the lease and no surprise appliance replacement costs or storm damage to repair.

The flip side of the coin is that you’re not building equity for the future by either paying off a mortgage or accumulating appreciation. Depending on your age and lifestyle, this may or may not be an issue. Landlords can raise rent upon the lease renewal to whatever the market will bear. Lack of control as it relates to personaliza­tion or modification of the property is a problem for many people; also, the always unknown of what a landlord has in mind for the future use of the property. There are rent vs. own calculators online if you need hard numbers on a property you’re thinking of renting.

There is also another way to rent rather than own; one way is the rent-to-own option. This arrangement is nothing new and typically is designed to help first-time owners to get a foot in the door of home ownership. Rent-to-own agreements put aside a portion of the buyer’s/renter’s monthly rent payment to use as a down payment on the ultimate purchase of the property.

Another option is the lease/purchase, which obligates the buyer to purchase the home at a pre-negotiation price at the end of the lease, or a lease option at the end of the lease, which allows the buyer the option to purchase if they want. Both lease purchase and lease option contracts have the ability to set aside a portion of the rent for the future transaction. Builders frequently offer the rent-to-own ability for new construction as a way to get people into vacant homes and mitigate the builder’s carrying cost.

These techniques are now also being used by buyers who have adequate funds and ability to purchase a home. Buyers in this category are choosing to rent under one of the rent to own options and hold on to their money for invest­ment purposes. This has become more popular as part of the fallout of increased mortgage rates, making borrowing money more expensive with the hope of reduced rates in the future.

All of these transactions are complicated and may be risky for both renter/buyers and seller/landlords. Legal advice is vital, and every detail of the arrangement needs to be clearly spelled out. Who pays the taxes and insurance, who is responsible for lawn maintenance, is the property furnished and who is responsible for wear and tear on the furniture, I could go on, but the point is the devil is in the details.

So now that we’ve all lived through what we’re hoping was the worst hurricane season ever, do we still want to own or rent? The answer to this question is highly personal and very difficult to decide. I for one am reserving my answer to this question till Nov. 15. Stay safe.

New take on hurricanes

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

I love to write. I didn’t come to writing from anything I learned in “J” school, where I never went, but rather in the school of hard knocks, working in business in New York City. Funny thing about writing, when I look back at the words I put on paper, my reaction is, “Who wrote that?” Sometimes writing is like an out-of-body experience; you know you wrote it but have no memory of doing it.

When I wrote last year’s hurricane column, we were experiencing a down real estate market and the idea of the hurricane season approaching wasn’t making that fact any easier to accept. Based on the April sales statistics in last week’s column, we’re still in a slow market, which may be a serious understatement. It’s been a challeng­ing year for real estate, and we won’t know what happens next until we get into the fall and the buyers and sellers have had a year to forget and relax.

Since real estate sales is such a vital component to the economy as a whole, everyone is holding their breath waiting to see what storms we may be looking at. I have decided not to read any of the predictions and close my eyes and ears every time I hear the Colorado State University forecast as my personal self-preservation tactic. That’s not to say when one gets close, we don’t still all need to prepare.

After last year, if you live on the Island and along the coast, have your evacuation plan in place. Food, medications, first aid kit, flashlights, batteries, radios, cash and some clothing. I remember last year there was a chance the water supply may not be available a few days after the storm so store some drinking water and water for flushing and washing. Last year for the first time, I took my homeowner’s and auto insurance policies when I evacuated and actually looked at them the day after the storm. I’m guessing this year generators will be a hot item to purchase, so if you’re planning on getting one, do it now.

When you leave, secure your prop­erty – lock everything tight – because last year, there was so much damage residents couldn’t get home and there were reports of vandals. Get out or roll down your window and door protections and put away any outdoor furniture or plants that can become airborne. Turn off utilities, particularly gas, and don’t leave your refrigerator and freezer with any raw meat that could damage your refrig­erator if power is off for several days.

Manatee County’s website has extensive information and guidance for after the storm. And remember that the FEMA value of your property now appears on county records along with tons of information going forward if you have damage.

Hurricane Helene was Sept. 24, 2024 and Hurricane Milton was Oct. 5, 2024. These were historic events that we pray won’t repeat themselves. Whatever the predictions are, don’t tell me the stress of anticipation is almost as bad as the actual storm. Florida is a big state, so storms have a very long coastline to choose from when striking.

I’m sure when I reread this column next year, I again won’t believe I wrote these words. If I can stick to my not listening to predictions vow, it will be a miracle.

Insurance rates going down?

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

There’s a lot of reasons not to want to think about insurance. It’s expensive, confusing and boring. However, according to those in the know, Florida insurance rates may be starting to tick down or at least stabilize.

Floridians have faced major increases in their homeowners and automobile insurance premiums in recent years. Florida also ranked as one of the worst states in the country for lawsuit abuse and our courts were flooded by frivolous claims. Our out-of-control litigation rules were a major reason that insurance premiums for both homeowners and automobiles were among the most expensive in the country.

It was so bad in Florida that in 2019 about 8% of all homeowners’ claims filed in the U.S. were filed in Florida. In addition, according to the National Association of Insurance Commissioners, Florida accounted for 76% of all claims that turned into lawsuits that year. Why would any insurance company want to do business in Florida?

The property insurance market was in a crisis and the Florida legislature acted to end frivolous lawsuits and abusive tactics by lawyers, while protecting people with legitimate legal claims. The regulatory authority was enhanced and penalties were imposed on any insurer that failed to pay customers’ claims properly and promptly.

The benefits of these reforms are now kicking in. Florida’s Office of Insurance Regulation announced in February that nearly two-thirds of automobile premiums are declining between 6% and 10.5% this year and more is expected.

Homeowners’ insurance rates are also on the right track. According to S&P Global, Florida premiums only increased 1% on average. This was the lowest rate of increase in the nation and well below the rate of inflation. This bodes well for the future with the hope that further stabilization will make insurance premiums more affordable in the years ahead. Having a healthy insurance market means everything to the value of properties, as well as aiding current homeowners and potential buyers to enter into a more affordable position.

Time to review the April sales statistics for Manatee County published by the Realtor Association of Sarasota and Manatee: Single-family homes closed 1.9% fewer properties this April compared to last. The median sale price was $464,000, down 12.5%, and the average sale price was $618,422, down 13.9%. The median time to contract was 50 days, compared to 44 last year, and the month’s supply of available inventory is 5.2 months, compared to 3.9 months. New listings were up 14.1% and new pending sales were down 3.2%.

Condos closed 1.1% fewer properties this year, the median sale price was $300,220, down 14.8% and the average sale price was $343,558, down 21.1%. The median time to contract was 63 days compared to 44 days last year and the month’s supply of available properties was 8.2 months compared to 6.3 months last year. New pending sales were down 8.3% and new listings were up 8.1.

These numbers are showing a stabilization of the market, meaning the declines are not as significant as they were previously. The Realtor Association still maintains “that the data reflects a market in transition, characterized by a stabilizing inventory, softening prices and a steady sales activity.”

Finally, Florida is setting the groundwork for other states to follow. Georgia and Texas are also considering legislation similar to ours. Whatever helps to improve our real estate market is fine with me, even if it’s boring.

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.

Florida condo owners getting a break

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

It hasn’t been pretty for condo owners in the Sunshine State since the collapse of the Champlain Towers South in 2021. After this tragedy, laws were passed requiring “milestone inspections” of older buildings and “structural integrity reserve studies” to determine how much money should be saved for future major repairs.

The milestone inspections were supposed to be completed by the end of 2024 for certain older buildings that are three stories or higher. Some condo associations hit owners with large assessments in the race to comply with the deadline.

On April 30, the Florida Legislature unanimously approved changing some of the condo laws enacted after the Champlain Towers collapse. HB 913 was passed to the governor’s desk, and he is expected to sign it into law. One of the changes was to extend by one year the structural integrity studies to Dec. 31 of this year. Hopefully, this will help some associations, but others will still struggle to meet the new deadlines.

Another change in the bill says the milestone inspections and structural reserve studies apply to buildings that have three or more habitable stories. Current law requires the buildings to have three stories or more, not specifying whether the ground floor is habitable. I remember at the time the original law was enacted, the definition of three stories was confusing, so clarifying this is an important point. It also could change how some condo buildings are evaluated going forward.

The bill will also allow for a temporary pause in reserve funding for two years immediately following a milestone inspection. This will give condo associations flexibility on meeting reserve requirements and also allow associations to use lines of credit or loans to satisfy reserve obligations if a majority of owners approve.

Under current law, the structural reserve studies target features that affect buildings’ structural integrity or safety, including roofs, plumbing, electrical systems, windows and exterior doors. The studies also include other items that have deferred maintenance expenses of more than $10,000, which the bill raises to $25,000.

Finally, the new measures also address education requirements of condominium association managers and management companies. In Florida, all newly-elected or appointed directors of HOA and condominium associations must complete a new board member education course within 90 days. This requirement also includes annual continuing education hours, with the amount varying based on the size of the association. The educational curriculum must include training on financial literacy and transparency recordkeeping, levying of fines and notice and meeting requirements.

The new law makes training mandatory for Florida condominium board members. Non-compliance by a director who fails to timely comply with the certification and training requirements may be suspended from board services.

Associations with fewer than 2,500 parcels require at least four hours of continuing education annually. Associations with 2,500 or more parcels require at least eight hours of continuing education annually.

In a variety of ways, educating board members is the most important issue to come out of this legislation. Many condo associations would not be in their current financial and possibly dangerous positions if their boards were better informed.

The spirit of the legislation as I see it is to keep condominium structures safe for residents and to give owners and associations some financial relief. Many homeowners in southern Florida are having to make a choice of whether or not they are going to leave their beloved Florida homes. HB 913, when finally approved, will give them some financial breathing room without giving up the structural integrity of their homes.

It’s a rare thing to see all of government come together and agree; something to celebrate.

Tariffs: The great unknown

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

No one likes uncertainty, not stock investors and certainly not homebuyers. Nevertheless, here we are, six months after devastating storms and facing another, what appears to be active hurricane season. Just as homes and psyches are getting back to normal, in rolls the biggest storm of all, tariff policies.

Nationally, buyers started gliding back into the housing market after two years of chronic slow sales. Showings for the week ended April 6 were up 39% from early in the year, outpacing the same period last year per Zillow. This was in spite of mortgage rates not moving off of the mid 6% range. Then comes tariff “reform.”

As it is, we on Florida’s west coast can’t seem to catch a break. Economic anxiety and extreme stock market volatility are destabilizing and confusing threats to the housing market on top of an already nervous housing market fueled by the storms. All of this makes potential buyers rethink their decisions.

A slowing economy raises fears of job security and investment security. If the negative effects of tariffs continue, it could put some pressure on the housing market and 2025 could be the third straight year of lower significant home sales. According to the National Association of Realtors, February pending home sales declined 3.6% from the same month in 2024, which is the weakest year for home sales since 1995.

Keep in mind that lower home sales do not always translate to lower selling prices, but if the trend continues, lowering prices could be a likely result. We as a country have a lot of equity in our homes starting during the pandemic years and not leveling off substantially. Home equity has climbed nearly 80% since early 2020 thanks to the extraordinary rise in house prices. Accord­ing to the Federal Reserve, that was about twice the rise in financial wealth including stocks and bonds as of the end of 2024.

This benefits all homeowners’ buyers and sellers alike. But the difference is that so many homeowners refinanced when the Feds slashed interest rates during the pandemic that nearly three-quarters of households with mortgages now pay 5% or less on their mortgages, giving them very little incentive to sell.

In addition, accruing equity and wealth in your home comes with another set of increasing expenses. Since a large portion of property tax is based on the assessed value of the property, the higher the assess­ment, the higher the taxes. Not all states have a cap on property taxes like Florida has for full-time residents, so if you’re not a full-time Florida resident or if you live in a state where taxes are not capped, you probably have had a large increase in property taxes over the past several years.

Another high financial expense that has increased is the cost of insurance and HOA fees for condos and even some single-family properties. Sometimes insurance goes up because the value of the property is higher, certainly a good thing. HOA fees are also impacted by insurance costs and specifically in Florida, the age of the condo.

And when you finally do sell, be prepared for capital gains tax, which could be a shock to the system if you are fortunate to have a lot of equity. The IRS has not increased the amount you can exclude from capital gains despite the huge amount of value accrued in our homes. It’s still $500,000 for mar­ried couples filing jointly and $250,000 for single filers, less expenses.

Owning a home has always been a sure-fire path to wealth, and I believe it still is and will still be the best investment you’ll ever make. But there are unknowns out there hovering over us and one starts with a big “T.”