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Tag: Florida real estate

Castles in the Sand

Calming waters

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

It’s the end of July, and most of the country is hot, really hot. But if you live near the water as we do, it doesn’t seem so bad. Imagine living in a landlocked state and it’s 95 degrees day after day. Aside from keeping cool, living near the water has many other benefits, according to a book called “Blue Mind.”

Sitting on a beach has always been one of my favorite things to do and I have been fortunate enough my entire life to have quick access to wonderful beaches. It gives me a sense of well being and just staring at the water puts me in a mildly meditative state, a blue mind.

This is exactly what Wallace Nichols a marine biologist talks about in his book “Blue Mind.” He says that merely being close to a body of water, sea, river, ocean or lake can promote mental health and happiness. Further, water lowers stress and anxiety, lowers heart and breathing rate and improves creativity. Sometimes even dreaming or daydreaming about a beautiful beach and crystal water can calm down anxiety.

Nichols’s theory would explain the popularity of Anna Maria Island and the accompanying increase in real estate values. Coastal Living Magazine had a recent list of the happiest seaside towns in the country. Anna Maria came in fifth and the only picture the magazine used in their piece was one of Anna Maria’s iconic cottages on Pine Avenue.

Now it’s time to take a look at the June Manatee County sales statistics reported by the Realtor Association of Sarasota and Manatee:

Single-family homes closed 2.2% fewer properties, however, the median sale price was up 5% to $315,000 and the average sale price was $397,987, which is 8.8% higher than last June. The median percentage of original list price to the final sale price was 96%, about the same as last year. The median time to sell was 102 days this June. Last year it was 90 days and the month’s supply of properties is 3.6 months compared to 4.1 last June.

Condos closed 12.2% fewer properties this June compared to last. Like single-family homes, the median sale price for condos was also up by 3.9% to $199,000. The average sale price was also up 1.6% to $236,307. The median percentage of original list price to the final sale price was 95%, up 1.3 percent from last year. The median time to sell was 101 days this year compared to 111 days last year and the month’s supply of properties is 4.1 months, the same as last June.

With the exception of fewer closings, June’s numbers are all in the green for both single-family and condos. If you have a smaller supply of properties to sell, chances are you will have fewer closings – the good and bad of a great real estate market. In addition, the median percentage of listing to sale price is a good indicator of the health of the market. When you’re getting close to 100% of listing to sale, you know things are good.

This time of year, it’s not easy to find a state that is naturally cool, believe me, I’ve tried. It’s also not easy to find a place where people are not over-connected and over-stimulated, creating a red mind the opposite of a blue mind.

However, we have it right here on Anna Maria and the surrounding areas. Is it worth the extra money for a home on or near the water? Just ask anyone who has one. “Blue Mind,” a perfect name for a cottage on the beach.

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Castles in the Sand

Are you as smart as a private equity firm?

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

The phrase, “follow the money,” goes back to the Watergate era as a method to shed light on corrupt activities by looking at money transfers. But following the money does not always lead to corruption. It could lead to some really good business advice.

Last week we reported the May real estate sales statistics in both Manatee and Sarasota counties being up substantially to the point of registering the highest numbers post-recession. Manatee County’s median single-family home sale prices were up 4.9% from last year continuing the $300,000 or above median sales price for most of the past year and a half. How much of this increase in selling price is fueled by investors, we have no sure way of knowing. What we do know is investors are totally into the U.S. real estate market.

Based on data released by CoreLogic, Inc., last month more than 11% of U.S. home purchases in 2018 were made by investors. This is a record high of investors, the highest recorded and nearly twice the levels before the 2008 housing crash. Investors are purchasing to flip properties or turn them into single-family rentals. The investor profile is everything from big private-equity firms to real estate speculators and individuals who want to get in on the action.

Investors swooped into the housing market in 2011 and 2012, buying with all cash when prices were low and mortgage credit was difficult to get for the average buyer. Economists gave them credit for helping to stabilize the market but expected the investors to slow down when prices started climbing after everything returned to normal. However, that hasn’t happened, partly because of strong rental demand.

Unfortunately, much of the rental demand is coming from first-time buyers, specifically millennials who are competing with investors that are buying up the low end of the real estate market with all cash transactions. According to the CoreLogic survey, investors purchased one in five homes in the bottom third price range in 2018, exactly where first-time buyers generally start at.

Complicating things further for first-time buyers is technology. The internet has made it easier for smaller investors and foreign buyers to purchase properties sight unseen. A few weeks ago, I talked about iBuyer companies, such as Opendoor, Zillow and Redfin that offer cash to homeowners who want a quick deal, avoiding the stress of putting their homes on the market.

These properties are either flipped or sold to investors for potential rentals. CoreLogic further reported that investors bought about half of the starter homes in Philadelphia last year and about 40% of the lower end of the market in Detroit. Again, first-time buyers are being run over by cash investors and technology.

Investors are also banking on renting vs. buying being a double-edged sword. Owning their home has always been the goal of Americans and many feel that renting is inherently wrong and a waste of money. Now, however, first-time buyers are rethinking that calculation. Mobility for job advancement is important to millennials who understand that about five years is the break-even point between owning and renting and may opt to rent until their careers are stabilized.

Renting instead of buying is a conversation that doesn’t make me happy. I still believe that owning your own home has more benefits than renting and should not be entirely a business decision. My opinion – follow the money straight to your new home.

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Real independence

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Castles in the Sand

Real independence

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

July 4 is Independence Day, representing this country’s desire to be independent of not only the British but also to be self-sufficient, able to make to our own decisions and to live in freedom. We’re a lucky people living in the United States and we’re also lucky to be living in Florida, especially if you own property here.

Manatee County real estate values and activity continue to grow practically every month, and May was no exception. These are the May sales statistics reported by the Realtor Association of Sarasota and Manatee, which reflect the multiple listing services recorded sales numbers.

Single-family home sales in May compared to May of last year increased by 13.3%. The median sale price, half above and half below, increased by 4.9% to $319,995. This is the highest median price in 10 years. In addition, since December of 2017, the median sale price for single-family sales in Manatee County has been at or above $300,000 for 12 of those months.

The average sale price for single-family homes compared to May of last year was $388,672, down by 4%. The median time to sell was 97 days, down 1%, and the month’s supply of properties was down 11.6% to 3.8 months. As a side note for single-family properties, cash sales were up 10.8%.

Sarasota County’s numbers are also good for single-family sales. The median sale price for May compared to May of last year was $305,305, up 8.7%, and the average was $411,199, up 8%.

Condo sales in Manatee County were up 6.1% and the median sale price was up 14.3% to $210,000 compared to last May. The average for May was up 5.2% to $246,381, the median time to sell was up 15.1% to 107 days and the month’s supply was down 6.7% to 4.2 months. By comparison, Sarasota’s median condo sale price was $238,000, up 1.4%, and the average sale price was up 5.5% to $361,732.

These are fabulous numbers for both Manatee County and our close neighbor Sarasota County. It was reported that these are the highest post-recession sales numbers for single-family properties for both counties. It’s hard to imagine things getting much better, but it is expected they will, based on the stable interest rates below 4% and the fact that the Federal Reserve has indicated it could cut interest rates further in the months ahead.

The state of Florida is also experiencing upward mobility in the sales of both single-family homes and condo sales. Statewide in May compared to last May there were 9.6% more closed single-family homes with a median sale price of $266,000, up 4.3%. Condo sales in the state in May closed 1.6% more properties with a median sale price of $195,000 up 3.7%.

Nationally, existing single-family home sales increased by 2.5% in May as reported by the National Association of Realtors. It also points to falling mortgage interest rates being beneficial to the housing market and is optimistic that the spring selling season will give the somewhat sluggish national housing market a well-needed push.

The national median sale price for single-family homes was $277,700, up 4.8% for last year and the strongest monthly pace of growth since last August. The National Association of Realtors also reported that there have been 87 straight months of year-over-year gains in the national housing market.

So, enjoy your holiday and the good news about the real estate market. We are indeed lucky in so many ways. Happy Independence Day.

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The buyer’s best buddy

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

I love learning new words, and I love applying those new words to anything in real estate. My new word is chimera, which is from Greek mythology and is a fire-breathing female monster. Now before you start with the female jokes, chimera is also a thing that is hoped or wished for but, in fact, is illusory or impossible to achieve.

There was a time in this country when mortgages were not easy to come by. Typically, if you wanted a mortgage to finance a home, they were short term loans with very large down payments, balloon payments and floating rates. The creation of the 30-year fixed-rate mortgage came about after the Great Depression and was part of The New Deal which established the Federal Housing Administration (FHA), setting up 15- and 30-year mortgages. Subsequent to that in 1938, Fannie Mae was launched as a way to free up mortgage money making it more available to Americans.

Fannie Mae and then Freddie Mac were created to encourage banks to make more home loans by backing the loans with federal guarantees, thus removing almost all of the home lending risk. These mortgages were then packaged into securities and sold to investors.

This was a great system until it wasn’t. A major part of why the financial crisis happened is because non-conforming loans were given to buyers who were essentially not qualified by lending institutions that were not verifying their ability to repay the loan. All of these subprime mortgages were sold as securities to investors who knew that Freddie and Fannie were assuming the risk backed by the federal government.

When the house of cards finally fell down, Fannie and Freddie were put under government conservatorship in 2008, fundamentally using your tax dollars to bail them out. So here we are now with about half of the home loans today still being backed by Fannie and Freddie.

There’s no question that these government-backed agencies have done their part in creating the American lifestyle and dream of home ownership, but is it time for an overhaul of the system? In favor of keeping the status quo, lawmakers point out that that government has a responsibility to keep housing affordable for both individuals’ ability to build wealth and allowing businesses that depend on homeownership to thrive. Also, they point out that banks don’t want to keep loans on their books and, if Fannie and Freddie are dismantled, banks would rethink making loans if the economy starts to slow down drying up available mortgage funds.

On the other hand, some say the government shouldn’t assume the risk associated with home ownership and more competition in the form of private equity would be a better mix. No one wants a replay of 2008.

Over the last 10 years, there have been innumerable arguments between lawmakers and government officials about how to proceed going forward and how big Fannie and Freddie should be allowed to become. Some say part of their business should be returned to private institutions, and some say they should not exist at all. None of this will be resolved anytime soon.

However, if your chimera is owning your home, it’s actually a good time to buy. Interest rates have dropped below 4 percent for the first time since early last year, and the Federal Reserve is holding steady with the prime rate for now.

Whatever happens between the federal government and Fannie Mae and Freddie Mac isn’t your problem right now; embrace the illusion and buy a house.

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Castles in the Sand

We may be getting older, but we’re not stupid

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

Did you know that every day 10,000 baby boomers turn 65? Just to refresh your aging memories, baby boomers are defined as those born between 1946 and 1964, therefore, baby boomers will be impacting our society for a lot longer. So, what do the smart real estate professionals do? They market smart houses and aging in place.

This is becoming such a hot topic that the continuing education course required of real estate licensees every two years contains two entire modules on smart homes and senior living. These are some of the more important points covered and tested in the most recent course.

A smart home is one that provides comfort, security, energy efficiency and convenience. These are all features that not only help seniors but also can improve property values especially for homeowners and prospective homeowners who are baby boomers.

When you’re talking cost to value in real estate, it’s always a balance between what it costs to make an improvement versus what the return will be. Well, based on a Coldwell Banker survey, 54 percent of homeowners said they would add smart home products if it made a house sell for more money. Sixty-five percent of those would pay $1,500 or more to add smart home features, and 40 percent would pay up to $3,000 or more.

In addition, Market Watch reports that the number of smart homes in North America is expected to hit 73 million by 2021 or more than 50 percent of all households. Unfortunately, real estate appraisers are just starting to give value to smart homes.

Smart homes are starting to have a very big impact on baby boomers who apparently prefer the phrase thriving in place as opposed to aging in place. Sixty-one percent of those over 55 are planning to stay in their homes indefinitely and 67 percent of those over 55 believe smart home technology could help them. Whether you’re thriving or aging, there are things that can help you live independently and safely.

Certainly, the most important smart features for seniors is health monitoring devices. There are many devices designed to monitor blood pressure and other vital signs that send alerts to a family member, physician or health care professional. There is a device to alert family members if a senior is not in his/her home or within a specific range and medicine containers that beep if the medicine is not taken. And one very practical device will automatically turn a stove off if it is left unattended for a predetermined length of time.

Next, are all of the convenience and security smart innovations – smart locks to avoid being locked out, smart home security monitors when not at home, smart sensors to track movements within the home and smart devices to let you and a family member know when a door or window is unlocked.

There is smart lighting that can be voice activated, smart thermostats and smart appliances which can create shopping lists and even give you the ability to look inside the refrigerator, monitor oven temperatures and activate your robotic vacuum cleaner.

Lest we forget the all-important remote shopping, ordering anything online, whether it’s clothes, books, your grandchild’s birthday present or food, has become second nature to people. Out of all progress made in smart homes, seniors having the ability to have things delivered is probably the biggest innovation and is growing daily.

If you’re a baby boomer or older, get smart. Don’t fight the technology, embrace it. It will only make your life easier and may also improve the value of your home. Remember – thrive, don’t age.

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Castles in the Sand

Home ownership and the millennials

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

It pains me to say this, and I hope it’s not true, but there are signs that the face of home ownership is starting to change. Housing was always the driver of the economy, both purchasing homes and the purchases that were associated with homeownership, but home ownership may be taking a time out.

More than 10 years after the financial crisis hit the housing market, it has not recovered on a national level to the same degree as the economy in general. According to the Census Bureau, last year there were a combined 5.4 million new and existing homes sold. This is about the same as in 1998, where we had 50 million fewer people living in the country. I don’t know why we’re surprised to learn that we still have a hangover from the financial crisis since housing was the primary reason for the financial crisis and the careless lending practices of government-backed Fannie Mae and Freddie Mac.

Now there is another little wrinkle in why the housing market has not picked up – millennials.

Millennials, those born from 1981 to 1995, were supposed to be the hope of the housing market when they reached the age when people usually purchase homes, only it’s not happening. The homeownership rate among households headed by someone under 35 was 35.4 percent as of the first quarter of this year. The Census Bureau goes on to say that, by comparison in 1999, the homeownership rate for this age group was about 40 percent.

The speculation is that the financial crisis hit this generation hard. The unemployment rate was high and it took millennials longer to get a foothold in the workforce, build careers and deal with college debt, leaving purchasing a home at the bottom of their list.

In addition, there has been a renewed preference for city living, which is where the higher paying jobs are and lower homeownership rates. And finally, this generation witnessed something that no one thought would ever happen – owning a home did not guarantee a good investment, complicated with a loss of incentive based on the 2017 tax cuts.

After all that good news, let’s see what’s happened in April in Manatee County based on the reporting of the Realtor Association of Sarasota and Manatee:

Sale of single-family properties did well in April compared to last April. The number of closed sales were up 3.9 percent. The median sale price was up 1.6 percent to $315,000, however, the average sale price was down 3.5 percent to $390,612. The median time to contract was 48 days and the median time to the sale of the property or closing was 92 days. The month’s supply of available properties was 4 months down 7 percent.

As far as condos, Manatee County closed 0.7 percent fewer this April compared to last year. The median sale price was also down 4.1 percent to $196,500 and the average sale price was down 7.8 percent to $236,127. The median time to contract was 43 days and the median time to the sale of the property or closing was 88 days. The month’s supply of properties was 4.7 months, down 4.1 percent.

Overall, the single-family properties are holding well over $300,000, an important a benchmark, and although condo sales are down in value, they’re not down substantially in numbers closed. The really interesting numbers are the amount of available properties going down for both single-family and condos. Four months of availability is low. It’s good news for sellers, not so good for buyers and not really good for a vibrant market.

Are we entering a new era? If we are, new isn’t always bad, it may just a realignment of our priorities and expectations. Real estate markets are dynamic and that’s a good thing. Maybe we were standing still for too long.

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Castles in the Sand

Falling in love with a second home

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

Last week we had a conversation about financing second homes and some updated government regulations about renting. We even touched on the pending Florida legislation regarding short-term vacation rentals, but this week we’re going to talk about the practicality and affordability of second homes and falling in love.

Vacation homes are the ultimate discretionary purchase just above recreational boats. The one thing both of these big-ticket items have in common is the emotional aspect that manifests itself by the warm tingle that overwhelms you when you set eyes on the object of your affection. But be careful, it’s dangerous to fall in love so quickly and requires a great deal of vetting.

A vacation home should make you feel like you’re on vacation when you walk in the front door. You don’t want to step in and notice the peeling paint, mold or the ancient appliances. You also don’t want something too big or high maintenance that it infringes on what should be a relaxing time. Technology will make some of this easier to manage as well as making your property more secure when you’re not there. You can control the heating and cooling, unlock the doors should a contractor need to get in and set up cameras to see if something looks not quite right.

That said, if you’re finding your vacation home overwhelming then your future buyer will feel the same way. Vacation homes live by an entirely different set of criteria than your full-time home. The location should be the prime motivator in making a second home decision and worry more about views, beach access and walkability than the quality of schools. According to the National Association of Realtors, the most popular vacation home locations are resort areas and beach locations which account for 66 percent of the market.

If you’re considering purchasing a vacation home with a partner or partners here are a few points to consider. What is each partner’s usage schedule? Unless you are really cozy with your partners, you need to carve out some private time for you and your family. Also, are friends or family of one the partners always welcome even if the owner is not with them? Should the property be rented part of the year to cover expenses and how will the maintenance costs be managed? And who gets the final say on picking upgrades like paint color, furniture or air conditioner and appliance replacement?

And the biggest consideration is what if one of the partners wants out for personal or financial reasons? An escape hatch needs to be developed and agreed on by all partners before purchasing. Some of the things to address are the timeframe, the minimum number of years to own and a buyout arrangement or selling the property.

Finally, many Florida second homeowners decide to convert their second home to their full-time residence for tax purposes. This option is becoming more and more popular as taxes in northern states continue to go up. Keep in mind that the state of Florida has a very advanced way of keeping track of how long Florida residents spend in another home they own, so keep good records since the burden of proof will be on you.

Pretty soon we may all need vacation homes to relax since I recently read that 6,000 new homes will be built on the north side of Manatee County. Our quiet little corner of the world is no more, but at least we all fell in love at the right time.

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Castles in the Sand

One of our favorite topics

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

It doesn’t take long for a get together with friends and neighbors to morph into a conversation about real estate. One of the preferred topics among the dozens of available real estate topics is second homes, so here’s something that you can float during your next real estate conversation.

Government-backed mortgages obtained through Fannie Mae and Freddie Mac frequently set higher standards for second home buyers. Second home mortgages are different from investment mortgages, which allow renting and always come with higher mortgage rates. But what if you want to rent out your second home but not classify it as an investment property?

Second Home Riders, which have been in force since 2001, are generally attached to the financing of a second home. The rider has always been interpreted by lenders as prohibiting second home owners with Fannie Mae and Freddie Mac backed mortgages from renting the property. This has recently been clarified making the rental of a second home more broadly accepted by lenders. The new wording for the rider allows homeowners to rent a second home after one year of ownership and it allows short-term renting in the first year.

The language was amended at the request of lenders looking for a clarification related to Airbnb rentals and other short-term rental services. Of course, short-term rentals still must meet state and local vacation rental laws. As we know, currently in the Florida legislature there are two vacation rental bills, which as of this writing are going nowhere. If the state Senate and House can agree prior to the end of the legislative session and the bill passes, it would preempt the regulation of short-term vacation rentals to the state and take the rental authority away from local municipalities.

For now, let’s take a look at all sold properties for the month of March reported by the Realtor Association of Sarasota and Manatee:

Single-family homes closed 8.4 percent more this March compared to last year. The median sale price (half above and half below) was $312,000, 9.5 percent higher than last March. You may recall that February’s median sale price took a dip below the $300,000 mark and was $298,500. The average sale price was $392,616, a 6.9 percent increase. The median days to sell were 58 days, an increase of 23.4 percent, and the month’s supply of available properties was 4.2 months, down 8.7 percent.

Condos closed 2.8 percent less this March compared to last March. The median sale price was $203,450, up 1 percent. February’s median sale price was $189,000. The average sale price was $240,995, down 1.9 percent, median days to sell were 74 days minus 14.9 percent, and the month’s supply of properties was 4.8 months, down 5.9 percent.

Overall, we had a great month. Not only are sale prices up, but properties are selling faster. The flip side is the number of available properties, which is down for both single family and condos. It’s never good to have low inventory. I can’t wait to see the April numbers.

It’s quite a different story on a national level. According to the National Association of Realtors, March existing home sales declined by 4.9 percent from February and 5.4 percent from last March. Nationally, the month’s supply of properties is down to 3.9 months.

Next week we’ll have a little more about Anna Maria’s favorite cocktail party conversation. In the meantime, enjoy your first home and your second home if you’re lucky enough to have one and be happy you live in Manatee County, Florida.

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Floods, saltwater and freshwater

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

The poet W. H. Auden said, “Thousands have lived without love, not one without water.” Surely, he meant both freshwater and the ocean water since both feed the body and soul, but both can have their challenges and both are subject to flooding.

Let’s start with the waters that surround our Island. This is the saltwater that feeds our souls. Those of us who choose to live on the Island or near the surrounding waters would never think of living in a landlocked state, it’s just who we are. But we do pay a price for it and that price may be increasing soon.

The Federal Emergency Management Agency (FEMA) has published new Flood Insurance Rate Maps which will change the base flood elevation for many Manatee County property owners. The last time these maps were updated were 30 to 40 years ago and since then there has been much new technology to better analyze data. In addition, the new maps will consider wave action as well as the height of flood waters.

The result of this will be more accurate maps and could result in flood zone ratings going up for some properties, down for others or no change at all. You can determine how your property is affected by checking the Manatee County website, www.manatee.org and keyword search “flood zone.”

The flood zones are assigned a letter and are also color-coded on the maps. Here is a quick review: A (blue), AE (lavender), Floodway (pink), VE (green), X (shaded) and X (no color). A, AE, Floodway and VE are all high-risk for flood and typically require flood insurance. X (shaded) is moderate risk and does not typically require flood insurance and X (no color) is low risk and does not typically require flood insurance.

As most homeowners who have a federally backed mortgage know, you are required to have flood insurance as one of the terms of the mortgage. However, all homeowners in flood zone areas should carry flood insurance. Also, the Manatee County website has lots of good information specific to your property so it’s worth taking a look at for a variety of reasons, including flood zone information.

But what about the other water essential to our lives, freshwater. It may come as a surprise that flooding in the home is the number one risk that everyday consumers make insurance claims on. One in 50 homeowners filed a water damage claim each year between 2013 and 2017.

Part of the reason there are so many more claims compared to previous years is the increase of water-using appliances like wet bars and water filtration systems as well as the popularity of second story laundry rooms. Old pipes in aging homes, worn out valves and worn out hoses contribute to interior floods.

Some of this can be mitigated by inspecting the caulking around tubs and shower stalls, watching for drips under sinks in both the kitchen and bathrooms, and changing hoses to dishwashers, washing machines and ice makers. Condo living is especially vulnerable to leaks from upper units and residents of upper units should be especially vigilant. There is some technology available containing water detecting sensors but at this stage, they are not 100 percent dependable.

Water is life but too much of it can be deadly and inconvenient. So, check the new floods zone maps and check the old hoses, then relax and enjoy the view.

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Traffic, real estate sales up

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

If you want to know why you’re starting to analyze traffic patterns so you can plan your trips to the supermarket, doctor’s office and Trader Joe’s, here’s the reason. During 2018, Sarasota and Manatee counties had more closed sales, an increase in overall inventory and a rise in median prices compared to 2017.

Sarasota single-family median home prices increased by 5 percent to $282,500, and Manatee single-family median home prices increased by 1.9 percent to $300,475 from 2017. Sarasota median condo prices increased by 3.2 percent to $232,300, while Manatee median condos increased by 5.8 percent to $190,500.

Meanwhile, the volume of single-family home sales in Manatee increased by 7 percent and in Sarasota, the increase was 0.5 percent. Condo sales in both counties as reported by the Realtor Association of Sarasota and Manatee, recorded the highest number of sales over the last 10 years. Sarasota increased by 8.1 percent and Manatee increased by 11.1 percent.

These are great numbers especially when you look at them compared to last year’s sales number as reported by the National Association of Realtors. Nationally, last year was the weakest for home sales since 2015 with buyers pulling back because of rising mortgage interest rates, a shortage of starter homes and a volatile stock market. However, the February home sales of previously owned homes nationally were up 11.8 percent, the largest monthly gain since 2015, obviously due to the lowering of mortgage interest down to 4.28 percent in March from 5 percent at the end of last year.

Let’s take a look at Manatee County’s February closed sales reported by the Realtor Association of Sarasota and Manatee:

Closed single-family sales were up 4.8 percent, the median sale price was down slightly by 0.5 percent to $298,500 and the average sale price was up 2.6 percent to $389,119. Median time to sell was 97 days up a little from 93 last year and the month’s supply of available properties was 4.5 months – no real change.

Condo sales were down, closed sales were down 14.9 percent, the median sale price was down 11.4 percent to $189,000 and the average sale price was also down by 10.9 percent to $227,849. Median time to sell was up to 101 days from 94 and the number of months supply of available properties was up to five months.

Keep in mind these types of statistics are a snapshot in time and there are a variety of things that can influence sale prices and sale numbers in any given month. It’s the overall picture for a sustained period of time that really tells the story, and the year over year story for Manatee and Sarasota Counties is spectacular.

The months of March and April traditionally experience the most closed sales, so I look forward to when those numbers are compiled before we head into our slower summer season. That said I may have to revise that statement down the road since there doesn’t ever seem to be a slow season anymore.

It goes without saying that Florida’s Gulf Coast is one of the most beautiful areas in the country.

We have beaches, sun, culture, low taxes and great choices when it comes to purchasing a home. And what comes along with all that is more people, more cars and overbooked restaurants, even Sarasota Airport is reporting a 35 percent increase in traffic during February this year, but would you change anything?

It just might take a little better planning.

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Should you digitally – or actually – renovate?

Technology can’t replace real estate brokers

Castles in the Sand

Should you digitally – or actually – renovate?

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

There comes a time in every homeowner’s life when they are faced with the dreaded renovation question. Frequently this question comes about when you’re thinking of putting your home up for sale. There is no doubt that move-in ready homes sell faster and sometimes for more money, but is this a job that you should tackle, or hire professionals?

If you’re convinced that do-it-yourself is the way to go, there are some websites to check out. Old House Online, Young House Love, and How To Sand A Floor will provide more information than any normal DIY project will ever need.

However, know your limits and leave the electrical, plumbing and structural repairs to the experts who will do it within current building codes and not burn the house down. But if you like getting your hands dirty, do your own demo. Naturally, make sure that the wall you’re taking down isn’t structural and doesn’t contain the plumbing to the toilet.

Certainly, the least difficult do-it-yourself job is painting. Exterior painting will be easier and look more professional if you power wash first, removing dirt, mold and peeling paint.

Even if you’re not a carpenter, replacing window and door moldings are pretty straightforward and forgiving of mistakes. Refinishing hardwood floors may be backbreaking but doesn’t require a master craftsman. And finally, know when to give up. If the project is not going well, your spouse isn’t talking to you and the kids are wearing gas masks, it may be time to make that phone call.

There is, of course, another way to go, there always is and with modern computer technology, you can have a virtual renovation if you’re selling your home. Since almost every home search starts with an online search it’s a great way to make your home stand out even if it’s slightly fudged.

Homeowners can take down walls, remove paneling, add swimming pools, garages and even turn your brown lawn green and make your dead plants bloom. This is a long way from the old school marketing of staging homes with rented furniture, pictures and knickknacks. Now all of that can be done digitally making an empty house looked lived in and inviting.

Sounds great right? The problem is when non-digital people come to look at your digitally-enhanced house and want to know why there’s a patio where they thought a pool was and what happened to the hardwood floor.

Needless to say, digital enhancements should be disclosed, and the National Association of Realtors code of ethics requires agents to present a true picture of the property in their advertising and marketing. Problem is since although the technology has been around it is now just starting to be widely used and guidelines for homeowners and agents alike still need to be established. If you watch any of the property renovation shows on HGTV you’ll see exactly what this technology can do to completely change the look and functionality of a home, and why it can be so misleading.

If taking advantage of this type of technology to market your property either personally or through an agent sounds like just the thing for you, full disclosure is a must. I’m not saying don’t to do it, it could bring a lot of eyeballs to the website as long as those eyeballs know what they’re looking at.

On the other hand, doing it yourself or hiring someone to move the wall and install the pool could make life ethically easier. The options are endless.

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Technology can’t replace real estate brokers

Good news and good news

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Castles in the Sand

Good news and good news

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

It’s been a while since we had positive news about how the national real estate market was trending. The little black cloud hanging over the head of the market has included a shortage of inventory, first-time buyers being priced out of the market and raising interest rates. Well, we may be seeing the black cloud starting to turn a little grey.

A couple of weeks ago, the U.S. Census Bureau released homeownership figures for the fourth quarter of 2018. The level of homeownership increased to the highest level in five years from 64.2 percent to 64.8 percent. This may not seem like a significant change, but it is a positive indicator of the real estate market shifting back to ownership from renting. The U.S. Census Bureau further states that the U.S. added about 1.7 million owner households in 2018 and lost 167,000 renter households.

Economists are interpreting this as a small but positive movement in the market, in conjunction with lower interest rates and a slight leveling off of listing prices. This may be just the thing some younger and first-time buyers need to put them on the path to homeownership.

And what about interest rates, are they really a lot better? Well, it depends what you’re comparing them to. Taking a look at 2017 and 2018, it appears the low point was December 2017 when a 30-year fixed rate mortgage could be obtained for as little as 3.93 percent. After that, the rates started climbing during 2018 when in November of 2018, they reached 4.94 percent. Then rates started declining to pretty much where we are now in Florida of between 4.36 and 4.40 percent. It’s important to understand that all of the rates we’ve been experiencing during the past three years are all good and all staying below 5 percent, a number that some of us would have envied in past years.

Another interesting thing about interest rates is that all states are not created equal. Three things that have a big influence on the mortgage rates offered in individual states is the cost of doing business in the state, the amount of competition among local mortgage lenders and foreclosure regulations. A state that requires a longer and more expensive foreclosure process will surely have higher interest rates built in by lenders. And in case you’re interested, New York state currently has the highest mortgage rates and, believe it or not, California has the lowest.

However, none of these issues have as much influence on the mortgage rates offered as an individual’s credit score. The lowest rates always go to the applicants with the highest credit scores, so keeping your bills current is especially important if you’re thinking of applying for a mortgage or a refinance.

And for first-time mortgage holders, don’t be surprised if your mortgage is turned over to a “servicer” to administer the mortgage – that is, collect your escrow and pay your property taxes and possibly insurance premium on a schedule that benefits you. Also, it’s always a good idea to verify that these two payments are paid on time by the lender or the servicer before you get a notice from the county or insurance company.

For a while, homeownership was somewhat out of style, particularly after the housing bubble burst. Not only did younger buyers lose faith in homeownership, but they also couldn’t afford it and decided the homeownership lifestyle was maybe not for them. But apparently, the American Dream is alive and well. I think it just took a little nap.

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House hunting – the fun and not so fun

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Castles in the Sand

House hunting – the fun and not so fun

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

I love technology and, although I may not be as well-versed as a 12-year-old, I do feel that for my generation I’m pretty competent. One of the best parts of the high-tech world we’re living in is the multitude of information on real estate at our fingertips. It also can be one or the worst parts of the high-tech world, especially if you’re house hunting.

Shopping online has become more than just a pleasant past time, it has become the go-to form of research for so many things, and house hunting is at the top of this list. Realtor.com makes it so easy to find homes in the zip code, price range and style you’re looking for that it will convince you to stay in your pajamas and make an offer from the bed, but that would be a whopper of a mistake. Online pictures are fabulous. Where else can you peek into someone’s home unobserved? But be careful – the wide-angle lenses typically used in real estate listings make small spaces look deceptively big and water views look endless. Naturally, pictures don’t show flaws in the property like cracked tile, torn screens and mold. Even renovated kitchens and baths will look better in pictures than in person.

The only way to thoroughly check a property is to get out of your pajamas, into the car and set eyes on it. The best thing to do is to use your online research as a guideline to help you pin down a location and get educated in price ranges.

In conjunction with that, getting a home value estimator online can also be a misleading and time-wasting effort. Unless you’re looking at cookie cutter homes or identical condo units, there are too many variables that go into setting the value of a home. Even then, the estimators can’t tell you about renovations and they also can’t keep current with market conditions.

But real estate professionals can keep current with markets and they generally have a pretty good idea about the condition of available properties in your price range and location. That said, remember that all real estate agents work for the seller of the property. The seller pays the commission. Unless you work with a buyer’s agent, be careful not to disclose too far ahead of time your interest in a property and/or an acceptable price for the property, especially if you meet an agent at an open house.

Almost all condo properties and many single-family homes and villas in Florida have homeowners’ associations. Don’t take this lightly. Thoroughly read the condominium rules and regulations, by-laws and financials. Condo boards are very powerful and can and will limit some of your activities. They also have the power to levy assessments. Not all of this is a bad thing; well run HOAs keep the values up and owner’s responsibilities down.

Finally, there are no perfect homes so don’t pass on a property because it may not have the exact color countertops or appliances you want. Changes and improvements you think you will need to make can be a good negotiation point and a little elbow grease could turn into thousands of dollars in real money.

House hunting is like marriage, best approached with good humor and compromise.  If I’m correct, I think you can do that online also. That would have been right up my alley. Where was the 12-year-old when you needed them?

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Florida’s new foreign buyers

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

I was born in New York state and up until 20 years ago when I moved to Florida, lived my entire life in the New York City and surrounding suburban area. There have been innumerable times during those years when I missed my old home, but frankly, this place in time is not one of those.

About a month ago, I reported the findings of the U.S. Census Bureau’s recent analysis. According to it, Florida was the second fastest growing state in the country after Texas based on an eight-year period ending 2018. In addition, Florida had the highest level of net domestic migration from July 2017 to July 2018, according to the U.S. Census data released in December. Also, Florida has been creating jobs, gaining 231,000 jobs in 2018, a 2.7 percent increase over the previous year. This brought the Florida unemployment rate down to 3.3 percent in December.

Governors and public officials in New York and other high taxed states like New Jersey, Illinois and Connecticut are looking for an excuse to blame the reason residents are leaving their states as well as their state deficits and high taxes on the federal government’s cap on state and local taxes. There is some truth to this contributing to the states’ shortfalls, but not everyone is leaving because they can’t fully deduct their property taxes. Maybe the real question is “Why are these states’ taxes so high to begin with?” Even though Floridians are benefiting from the North’s problems, rather than gloat we should be paying careful attention not to make the same mistakes.

An analysis by Zillow shows the preliminary data indicates a jump in Florida home purchases by buyers from high-tax states, as well as home values increasing in other low-tax states. According to real estate brokers in the Miami area, the loss of their foreign buyers has been replaced by buyers from New York, Florida’s new foreign buyer. Considering that Manhattan co-op and condo sales last year were down 12 percent from 2017 and that New York state was the largest overall population loser, you have to take the census reports seriously.

Down here in Manatee County, we’re ready for all of those tax-soaked Northerners. Just take a look at the January sales numbers from the Realtor Association of Sarasota and Manatee.

For single-family homes in Manatee County, the median sale price (half above half below) was $309,000, 3 percent more than last January. The average sale price was $386,927, exactly the same as last year. Median time to sell was 97 days, up 4.3 percent, and the month’s supply of properties available for sale was 4.4 months, no change.

The condo market is doing better. The median sale price was $195,000 this January, a 13 percent increase over last January, and the average sale price was $241,191, a 10 percent increase over last January. The median time to sell was 94 days, an increase of 11.9 percent, and the month’s supply of properties was 4.7 months, down from 5 months.

Again, the market looks like it’s leveling off as previously stated. However, we have not hit the busy selling and buying season yet, so the jury’s still out.

I guess after 20 years, I’m a Floridian. After all, if Amazon decided not to move to New York City after the city giving it billions of dollars in credits, who am I to whine? My advice to Island brokers – better check out advertising rates in The New York Times. I think it just might be the right time.

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A home’s equity is sometimes subjective

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Castles in the Sand

A home’s equity is sometimes subjective

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

Are you familiar with the expression, “The happiest days of a boat owner’s life are the day he buys the boat and the day he sells it”? It’s not unlike homeownership. The happiest day is the day you walk into your new home deed in hand and the worst day is the one when your real estate broker tells you it’s not worth what you thought.

Last week we talked about the national real estate market cooling off in terms of the number of sales and selling price. We also are beginning to see some signs of this on Anna Maria Island with an overall leveling off of our recent outstanding market. It’s not necessarily a bad thing in a go-go market to take a pause and attract new buyers into the circle, but first homeowners need to readjust their expectations.

Freddie Mac’s chief economist coined the phrase mental recession, not a real recession only the perception of a recession. The danger of the mental recession is that it challenges your mental equity.

We all know that the definition of equity is the difference between the value of the asset (your home) and the value of the liability (your mortgage). Even though you won’t find mental equity in Webster’s Dictionary, all real estate professionals know exactly what it means. Essentially, it’s the value of a property in the homeowner’s mind and only in his mind. Whereas, the actual value of the property is based on comparable sales, location and the climate of the real estate market at the time. Frequently, these two values can be light years apart. Get the picture?

The point I’m trying to make is that real estate markets are dynamic. They’re always in flux, and buyers and especially sellers need to understand that last year’s values may not be this year’s values. Don’t get too comfortable with the mental equity because it can change in a heartbeat for both good and bad.

If you’re a buyer, Valentine’s Day was last week. Don’t fall in love based on previous sales until you’re sure the market will hold. If you’re a seller, turn the reality check button on in your brain and don’t turn down any offers no matter what your brain is telling you. Mental equity is not your friend; don’t get too cozy with it.

All of that said, we are just starting the busy selling season, which continues until about April or May when visitors and potential new residents feel comfortable enough to make an offer on available properties. And based on recent census numbers, there should be plenty of them. As previously stated, Florida’s population increased by 322,000 residents last year alone and is the second fastest growing state in the country.

However, some of those wanting to relocate to Florida could be faced with a slowing market where they’re coming from, particularly big city areas in the Northeast and Midwest who will be most affected by 2018’s change in federal tax deduction.

Everyone needs to keep their options open and flexible. Don’t allow your mental equity to make you mental and make sure that your first day of homeownership is indeed one of the happiest days of your life.

More Castles in the Sand:

Why is the housing market declining?

Selling your home – it should show like a model

Sunshine State population growth