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Tag: Florida real estate

Castles in the Sand

Why is the housing market declining?

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

It’s a curious situation the national economy is in right now. In spite of the stock market having a fit in December, not only did it make a strong comeback, but the employment statistics have remained strong. So why isn’t the housing market living up to the rest of the economy?

According to the chief economist at Freddie Mac, “We’re in a mental recession,” meaning bad news like the government shutdown, the stock market vulnerability in December, higher interest rates and international financial markets in a flux start to snowball, making buyers nervous. This is especially true for first-time buyers who are nervous to begin with and second home buyers who have the luxury to wait and see.

According to the National Association of Realtors, December was the weakest month for home sales in three years. December 2018 sales fell 6.4 percent from November of 2018, and 10.3 percent from December of 2017. Not unexpected, when the number of sales declines, the sale prices can’t be far behind.  The National Association of Realtors reports the median sale price for an existing home in December grew 2.9 percent from a year earlier, however, it was the smallest increase since March 2012.

Even the top two brokers on Anna Maria report that there were no significant price increases in 2018 and that the market appears to be stabilizing and leveling off in 2019.

Mortgage rates have come down in recent weeks and are now back to about 4.45 percent for a 30-year, fixed-rate mortgage, down from 5 percent two months ago. The Federal Reserve has also sent signals that it is carefully monitoring the interest rates as they relate to housing and the broader economy. This means to me that the rates will likely stay pretty much where they are for a while.

Stabilized interest rates and a slow-down in sale prices are not all bad news, especially for the first-time buyers that the market always needs to keep the ball rolling. One of the very real problems that first-time buyers face is the monthly payment on student debt, which may keep them from qualifying for a home or at least is making them concerned about keeping up payments, even if they do qualify. Student debt is now at $1.5 trillion, exceeding credit card debt and car loans, making a sizeable impact on the economy.

The Federal Reserve Bank indicates that homeownership among people ages 24 to 32 fell 9 percentage points to 36 percent from 45 percent between 2005 and 2014. As a comparison, almost 79 percent of people age 65 and older are homeowners; for ages 35 to 44, 59 percent are homeowners; and of all ages, 64 percent are homeowners. This is unfortunate because we desperately need these young buyers.

The Fed said that although many factors contribute to homeownership, 2 percentage points or about a fifth of the decline was tied directly to student debt. This represents 400,000 buyers who did not make a home purchase because of student debt. The Federal Reserve report finally gives us a better understanding of why the housing recovery has been weaker than other segments of the economy.

A strong real estate market is the driver of the economy in many areas since homeownership involves the purchase of goods and services needed to maintain the property. Hopefully, the country will get out of its mental recession soon, but don’t let that stop you from having a happy Valentine’s Day.

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Castles in the Sand

Selling your home – it should show like a model

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

Every year around this time I try and remind homeowners what potential buyers are looking for. Even though our market remains brisk, we are on the brink of the busy selling season, which will get in full swing as more and more visitors return to the Island with an eye to purchasing their paradise home.

Let’s start with the old chestnuts of getting your house ready for sale. Since cleanliness is next to you-know-what, every inch of your house needs to be spotless. On an island where there are more sand and salt than the average Northerner sees in a lifetime, it’s always a challenge to get it out of our homes and off our windows. But out it must go; not a speck of sand on the floors and not a grain of salt on any of the glass.

Island living also means that mold grows on any damp surface faster than McDonald’s cranks out Big Macs. Scrutinize every inch of bathrooms, kitchens, grout and outdoor furniture looking for mold or the beginning of mold. Remember mold and dampness smell. You don’t want your home smelling like a high school locker room.

Clear off countertops in the kitchen and bathrooms, especially if you have really nice hard surface ones. Organize and declutter closets, the kid’s toys and the laundry room. If you’re lucky enough to have a garage, clean it out to make room for an actual vehicle, not just bikes, lawnmowers and old paint cans.

You also might consider storing away any collectibles you may have on display, including family photos that could become a distraction to buyers touring your home. The object is to make everything look larger than it might really be and keeping the buyer’s eye on the ball, not your daughter’s wedding.

Make sure all systems like heat and air conditioning and appliances are in working order and there is no peeling paint. When buyers pull up to your home, they want a reason to get out of the car, so give them one. Make sure there’s nice landscaping, the weeds are pulled and walkways cleared. How about another old chestnut, painting the front door a jazzy color. They say red is good luck.

You can’t totally remake your property before sale, but you can keep it as neutral as possible.

A little paint goes a long way, so consider painting some of the walls where needed in a light gray color, which is very much in vogue right now. Even removing some heavy dark furniture will give a feeling of more space, as well as a lighter, more open impression.

You may not be able to create high ceilings overnight, but you can make sure the ceilings don’t have any cobwebs dangling from them. And in a hurricane-prone area like ours, owning a generator that can be passed on to a new owner could be just the right touch.

Finally, anything just a little off about your property could raise a red flag to buyers who may already be guarded during their house hunting experience. Don’t make them think that you’re not a responsible homeowner because you missed something as minor as a cracked bathroom tile or broken doorknob.

If you’re putting your property on the market this season, good luck. Everything is pointing to the Island being busy and the real estate market being equally busy. Let the sun shine through those windows.

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2019 tax nightmare

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

The Christmas tree is put away, the leftover food and holiday cookies are hopefully gone, and the gifts have been returned to the mall – so what’s next? The day has arrived, the day that some Americans have been dreading for over a year, the day we have to start thinking about filing 2018 tax returns.

A couple of weeks ago I received an email from my mortgage lender labeled Important Tax Documents Enclosed. I knew what it was and, as with all other important tax documents received this time of the year, it immediately switched me into denial mode. Since the tax returns for 2018 will have significant changes, particularly to homeowners, I thought I would do you the favor of being one of the first to put you in the “I hate tax time” mood.

The Tax Cuts and Jobs Act that passed last year is the first major change to the American tax system in 30 years. The changes will help some individuals more than others but all of us will be affected, particularly homeowners.

There are a couple of major changes for property owners and they all have to do with mortgage interest and state and local taxes. First of all, the mortgage interest deduction can only be taken on mortgage debt of up to $750,000, which is down from $1 million prior to 2018 for mortgages on all properties. However, this only applies to mortgages taken after Dec. 15, 2017. Preexisting mortgages are grandfathered in. In addition, the mortgage interest deduction on primary and second homes, not investment properties, was saved and still can be taken.

However, interest on home equity debt can no longer be deducted at all, whereas previously up to $100,000 in home equity debt could be considered. There is an exemption to this if the home equity loan can be proven to be used substantially for home improvements.

The next really big homeowner issue is what is commonly known as SALT, which stands for state and local taxes. The new tax law puts a cap on this deduction of $10,000, including all owned properties. So, if the combination of state, property tax and sales tax is $15,000 for the year, you can only deduct $10,000. Naturally, this is a very big issue in states that have high state income taxes and even higher property taxes. Fortunately, Florida is not one of those.

Contributions are mostly the same, but medical expense deductions have been reduced from 10 percent of adjusted gross income to 7.5 percent of adjusted gross income. There are a few other things that can no longer be deducted like tax preparation expenses, moving expenses and others.

The standard deduction increase, however, is probably the biggest change to the tax code which involves everyone. The standard deductions for individuals and married couples have just about doubled from previous years to $12,000 for individuals and $24,000 for married couples. For many households, the increase in the standard deduction may not make it worthwhile to itemize your tax return. For example, a married couple pays $8,000 in mortgage interest, makes $4,000 in charitable contributions and pays $5,000 in state and local taxes totaling $17,000 in deductions. With a $24,000 standard deduction, it may not be worthwhile for this couple to itemize. Since everyone’s tax returns are different, a tax professional should always be consulted.

Good mood, bad mood, yours depends on your unique tax situation. But in the long run, it’s only money and there are always more important things, so get out of the denial mode.

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Castles in the Sand

Is a piece better than the whole pie?

Written by Louise Bolger on . Posted in Archives.

A very long time ago in the history of writing this column, I discovered fractional ownership as a new and interesting real estate topic. I quickly dropped the subject when I realized it wasn’t something that had caught on in great numbers across the vacation real estate industry. Well, recently there was an extensive piece in The Wall Street Journal about fractional ownership which sparked my interest again, so I took another look.

As all of us who live in Florida, and certainly on Anna Maria Island, know, second homes are the ultimate discretionary purchase. Many people would like to have one but no one really needs one. Therefore, it would appear that fractional ownership arrangements would be the perfect fit for potential second homeowners. But are they and how do they compare to timeshares?

Timeshares and fractional ownerships are very similar in that they can be sold, gifted or inherited, and require annual maintenance fees. Fractional owners receive a real property deed whereas timeshare owners receive a type of deed but specifically for an assigned period of time, usually one or two weeks. In addition, fractional properties are usually organized into residence clubs, which appeal to more upscale buyers with higher prices, nicer amenities and fewer owners than timeshares, making the concept as well as the properties more exclusive. But be careful. The more fractions that are sold, the more they resemble timeshares.

Also, proponents of fractional properties point out that a purchase of a fractional property can be arranged for much longer periods of time, creating more of a second home concept instead of just a vacation getaway. In addition, the case can be made that fractional ownership provides equity benefits with more of the possibility of making a profit when it’s sold, but like all real estate, there are no guarantees. Although timeshares can appreciate in value, depending on the property and location, typically they do not. Of course, conventional financing for both fractional ownerships and timeshares is near to impossible.  Purchases are generally made with cash.

So, who are the buyers of fractional ownership? They are generally people who can afford a vacation home but don’t have the time to use it on an annual basis and just want a winter or summer getaway. Or, as the Wall Street Journal piece pointed out, they may be people who want to spend months hopping from one fractional to another around the globe.

Although there are fractional ownership properties in Florida, I couldn’t find any on Anna Maria Island. Two of the big players in fractional ownership clubs are Timbers Resorts and Elite Destinations. There is also the Luxury Fractional Guide online to check out if anyone is interested in further research, and you should do your research. Since fractional ownership clubs make their money on selling the properties and reselling the properties, it’s important to verify that their maintenance program is well funded and well managed.

The fractional ownership concept makes me a little uneasy, but for owners who want a property in an area with escalating property values, it may be the only way to spend time there for more than just a quick visit. While I was doing my research, I found that Cabo San Lucas, Mexico, had several fractional ownership clubs. It just so happens that I’m headed there at the end of the month. What are the chances of me coming back with a new deeded property? I don’t think so; I want all of the pie.

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2019 real estate trends

Written by Louise Bolger on . Posted in Archives.

Every profession has its experts and every expert has their expert advice for the future. Sometimes they’re right, sometimes they’re wrong, and sometimes they wish they’d never gotten out of bed. Have you seen the stock market? Nevertheless, the experts still keep on coming, and for the 2019 real estate market, I found a couple for you.

Forbes.com is a wealth of information about any business venue. It will even tell you the net worth of celebrities – Steven Spielberg, $3.7 billion and Oprah Winfrey, $2.8 billion. But what they are really good at is predicting the future or as it calls it, future trends.

For the 2019 real estate market, it talks a lot about the Millennials, which are the largest segment of buyers. Forty-five percent of new mortgages will be applied for by millennials vs. 17 percent by boomers. In 2020, when the Millennials turn 30, Forbes pushes that buying trend up even further and is predicting a good real estate year. This year, however, Forbes says it will be a slow real estate year which could be good long-term since the demographics (millennials) will support the demand. This is expert talk.

It also feels that first time buyers will be looking at condos and lower end vacation homes.

These properties are less expensive, which will make them, more affordable in view of raising interest rates, again talking about Millennials.

On another note, Forbes is recommending purchasing property in the Bahamas, which after being hit by several hurricanes is just starting to rebuild. Waterfront property there is 10 cents on the dollar compared to waterfront property in Florida and only a 20-minute flight.

Realtor.com has two shocking forecasts. The first one is that mortgage interest rates will hit 5.5 percent by the end of the year, and the second is that the market will remain a sellers’ market. Sellers can glow over this, but the buyers aren’t going to cave in to any price sellers are asking, so sellers are going to have a little tough going.

Not tough going, however, are Manatee County’s November sales statistics taken from the Realtor Association of Sarasota and Manatee’s website.

Single-family homes closed 7.6 percent more properties than last November, and condo’s closed 12.9 percent more. The median sale price (half above and half below) for single-family homes was up 8.5 percent to $313,496 from last November. Condo sales were also up 2.0 percent to $186,500 from last November. The average sale price for single-family homes is up 4.9 percent to $379,982, and the condo average sale price is up 1.4 percent to $255,619. The median time to sell for single family and condos are all between 90 and 95 days, and the month’s supply on the market is staying about four months for all housing sectors.

The big news for November is that our neighbor Sarasota has finally broken into the $300,000 price point for the median sale price, increasing 5.3 percent from last year. Manatee County has achieved this several times this year but this is the first time Sarasota has.

Our numbers are looking good compared to Florida statewide results. The median sale price for single-family homes was $255,000, up 6.3 percent, and the median sale price for condos was $185,000, up 5.1 percent. These numbers are reported by the Florida Realtors Research Department.

Are our future lives being dictated by 30-year-old Millennials? Something tells me yes, they are. As long as they keep the real estate market flowing, it’s OK by me, and that’s my prediction.

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Tax overhaul saved one thing

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

It’s the holiday season and time to concentrate on family, friends and good cheer for all. There’s also one more thing that starts working its way into the deeper recesses of our brains in December – taxes.

Last year’s substantial tax overhaul resulted in a lot of people being not too happy, especially property owners. Caps on mortgage interest and local and state property taxes have homeowners and investors holding their breath waiting to see what their 2018 tax returns are going to look like. However, one of the favorite tax breaks for investors was not touched and that’s the 1031 Exchanges.

A 1031 Exchange allows you to exchange or reinvest proceeds from your original property and defer the capital gains on the profits from the sale. The exchange only applies to properties held for business or investment, therefore, your personal and primary residence is not eligible for the benefits of the exchange.

Prior to the tax overhaul properties could be exchanged for like-kind properties, which included all real property including artwork and valuable collectibles. Now, however, that part of the law has been amended to allow for only real estate to be recognized as an exchange.

Although the 1031 Exchange benefits big investors, it also can be an advantage for small investors and second home and vacation homeowners who take the time to establish their property as a rental income producing property. It’s possible to trade up your vacation home to a larger one by converting your second home from personal to business use by renting it for a specific number of days for at least two consecutive years. This is a nice way to defer the capital gains on your vacation property, which typically does not qualify for a capital gains exemption since it’s not your primary home, while still giving you the ability to purchase a larger home for your family.

There are certain criteria you have to meet to qualify for the exchange. You have 45 days from the date of the sale of the old property to identify potential replacement properties. In addition, you must acquire the new property no later than 180 days after the sale. It sounds a little complicated, but individuals use this tax break successfully multiple times and just keep rolling over the capital gains into another property. This can also be used to preserve wealth invested in real estate, which is a little more complicated.

As with any tax questions and changes, you need a competent CPA and/or tax attorney to review your particular situation before undertaking this process. And remember, your primary home is not eligible for an exchange and is subject to and also benefits from a whole different set of IRS regulations. Certainly, I have no way of knowing if 1031 Exchanges are used for investment properties and second homes on Anna Maria Island, but my guess is that the Island and its ever-increasing property values is prime for one of the IRS’s most popular exemptions.

So, while you’re sipping the eggnog and wrapping gifts, start thinking about April 15.  If you plan ahead, Santa may leave you a very substantial gift in your stocking in a couple of years. Now that’s what I call a stocking stuffer.

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Anticipating condo special assessments

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

Owning property is nothing short of waiting for the unexpected to happen. Whether you own a single-family home or live in a condominium community, you can be sure that eventually, you will have to make a major repair involving major money. The only difference is how those repairs will be funded.

When you own your own home and the roof needs to be replaced, it’s your financial responsibility. When you live in a condo community, it’s still your responsibility only it’s administered differently. Hopefully, your homeowners’ association will have anticipated major repairs and will have funded these and other expenses accordingly, however, if they didn’t, get ready for a special assessment.

Special assessments are designed so that condominium boards can pay for unanticipated expenses they don’t have the money for. These are one-time payments that can be a lump sum or spread out over a specified period of time. Once the purpose of these additional funds is met, the special assessment ends, and if there is money that was collected from the owners, it cannot be used for any other purpose and must be refunded.

Condo boards have the ability to pass a special assessment as they see fit without the majority vote of owners. Owners must, of course, be notified of a scheduled vote and the purpose of the assessment. Typically, owners know well in advance of an upcoming assessment since these matters are discussed in prior board meetings with the full knowledge of owners and a full explanation from the board of why this is necessary. Frequently boards will decide if it is more advantageous to borrow the money for the repairs and use the special assessment to repay the loan.

Another type of special assessment that many condo associations in Manatee County experienced last year was a special assessment for hurricane damage. Just like single-family homes, condo associations have a hurricane deductible as part of their insurance policies. If the association requires repairs after a hurricane, as many experienced with Irma, that are not covered because of the hurricane deductible, the owners will likely be billed for a special assessment to cover these repairs.

However, most homeowners’ insurance policies for condos have loss assessment coverage to reimburse owners for assessments levied on them for hurricane damage. Loss assessment coverage by Florida law is a minimum of $2,000, and some insurance companies have a $250 deductible from that amount.

It is particularly important for anyone who is considering the purchase of a condominium to inquire about the financials of the association. Ask if the association is fully funded, meaning that it has anticipated future repairs and is funding this amount from regular dues payments. If you have an accepted offer and contract on the purchase of a condo, you will be provided with the financials of the association and have time to understand how healthy the association is financially. Also, be sure to ask for a list of recent special assessments and their purpose. Naturally, older condo communities will face more maintenance issues, and you want to be sure that the board has recognized and planned for these events.

Expect the unexpected when you own any kind of property because for sure it will happen. Just because you own a condominium, don’t think that everything is automatically taken care of. It’s your responsibility before you purchase to understand and feel comfortable with the way funds are disbursed within a homeowners’ association.

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Before you sell, become a home historian

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

Last week was Halloween, and we talked about disclosing everything, even if not required by law, that might be negative about your home to prospective buyers. What may seem ridiculous to you, like spirits real or not, deaths in the property or other than conventional activities, could be a hot button to a buyer. But do you know everything about your home, the good, the bad and the ugly? Putting your property on the market is the perfect time to delve into your home’s history and a unique marketing tool.

The state of Florida is not known for many historic homes like New York and Boston, dating back to the founding of the country, and even though there were settlements in Florida going back to the Spanish, not too many actual homes have survived compared to the northeast. Bradenton has some beautiful older homes downtown, as do other cities around the state like Jacksonville and St. Augustine, but it doesn’t matter if your home or the home you’re considering purchasing is 100 years old or 20, don’t you want to know its history?

There are professional house historians willing to do research, particularly on older homes dating back to years before records were efficiently kept. They will research public records, church records, history books and even do interviews with local residents who may be familiar with the property. This service, of course, is provided for a hefty fee and results in a nice book full of information for the owners and future owners.

I love the concept and feel that even if your house was built in more recent years, there may still be information about it you don’t know. For instance, who was the architect who designed the house, are the original drawings still on file, and what are the names of the previous owners, an answer which could surprise you, especially in a second home beach area like Anna Maria.

Wouldn’t you just love to know if famous people visited the Island and stayed in your house, such as actors or political personalities? We already know that professional ball players and circus performers came to Anna Maria, maybe they stayed in your home. The possibilities are endless, especially if you can find just the precise person who has been around long enough to point you in the right direction.

A search of the town records would also give you structural information about the home. Were permits pulled to repair damage that could have been from fire or flooding or pest infestation? Did a major hurricane occur in the early years of the home and are there any survivors from that event still around to interview?

You might want to include pre-renovation photos from the time you owned the property, pictures of some things unique to your house like the wall showing how your children grew through the years or a picture from your daughter’s wedding in the yard. Include dates of significant storms and if you evacuated and to where. Brief introductions to current neighbors and some history on the surrounding homes would be a nice touch.

Not only is a history book a great way to introduce potential buyers to your home, but it’s also a wonderful gift to new owners to pass down to future owners. It shows the love you have for your home and keeps the story of the house alive.

Every house has a compelling story to tell, and every room within the house represents a life lived. Make your house one for the history books.

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Real estate sales can require scary disclosures

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

What do people do when they have everything they can possibly need? A safe and secure place to live, plenty of good quality food and access to modern health care. You know what they do, they pay to be locked in a spooky room and challenged to find a way out.

One of the hottest forms of entertainment in our privileged country is called an escape room. In it, you are literally locked in for an hour with a group of other people and look for clues while the ghost of a recently departed leaves hints to help you find an exit.

Crazy as this may sound, it’s not nearly as crazy as selling properties where there is a belief of hauntings or a death in the property. In September I wrote a column about property disclosure and discussed that the state of Florida holds sellers responsible to disclose defects in a property. Although this disclosure does not have to be in writing, it is recommended for the seller’s protection that it is.

The state’s guidelines indicate that disclosure does not have to be made if the property was inhabited by a person infected with HIV or AIDS or that a murder or suicide has occurred or is suspected to have occurred on the property. Likewise, disclosure does not have to be made if the house is known to be haunted since there is no way to authenticate a haunted house; it’s all subjective.

However, the guideline also states that disclosure must be made if there is a potential impact on the value or desirability of the property. This is a little bit of a conflict and a gaping gray area in an already ambiguous zone of the disclosure. Most real estate professionals would advise full disclosure for rumors about hauntings as well as unusual deaths in the property just as you would disclose foundation cracks hidden behind walls particularly if you’re asked.

Even though sellers are not obligated to do so and would not have a financial obligation after a closing, why make a buyer feel he/she has been duped? Since some buyers are sensitive to previous activity in a property, the disclosure is the best course of action, as silly as it may sound. Even Bernie Madoff’s New York City condo had a problem selling because buyers didn’t want to be associated with the bad energy that may be lurking in the property.

But what about future developments adjacent to properties or bridges? Manatee County is exploding with construction – some very big that will change the lifestyle of nearby residents, not to mention the rebuilding of both bridges out to Anna Maria Island, both of which could impact existing properties.

These are projects that have been approved, on the books but not begun and would not be obvious to a potential buyer. Are sellers obligated to disclose future approved projects that could have a substantial financial impact on properties? Don’t look to me for an answer, but if it were me and I knew something on the books would financially or aesthetically impact property I was selling, I would have a sit down with an attorney.

In the spirit of full disclosure, you should disclose the spirits if you have any. Have a happy Halloween and watch out for the ghosts – even the friendly ones.

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Management of condominium associations

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

To say that condominium and homeowner association living is a big part of the Florida lifestyle would be a massive understatement. Condo living offers the freedom that not only retirees are looking for but also couples who travel a great deal and may also have second homes.

Most of the time it requires nothing more than to pay your association fees, lock your door and move on. However, these associations must be managed by someone, and the question becomes should they be managed by a professional management company or should they be self-managed?

If you’re thinking about making a purchase of a condo or homeowner association property, one of the first questions you should ask is who is the manager. By Florida Statute, the Community Association Management Act, professional association managers must be licensed. A community association is defined as an association that has 10 or more units or has an annual budget greater than $100,000.

Management companies work under the direction of the board of directors of the association and assess a fee based on services they are performing for the association. Typically, these services include recommending, hiring and reviewing contracts for outside vendors to perform maintenance work, landscaping and special projects for the association. Through a bank or other financial institution, they collect association fees and prepare monthly and annual financial statements and budgets in conjunction with the board of directors. They also can review applications from potential owners and tenants and advise on insurance.

But perhaps the most important thing that professional managers do is to explain the Florida condominium laws related to reserves, building codes and other obscure financial and building issues. All of this relieves the board of directors and other residents from the time necessary to perform these duties.

That said, many homeowner associations still want to self-manage and there are pros and cons for doing this. The obvious pro is financial savings, both for management fees and also for resident managers keeping a tighter control of the purse strings. Also, by having in-house control and avoiding a middleman, it is possible to make decisions more expeditiously.

However, these savings in money and time come with a price. Being a board member without a management company to assist you is a very time-consuming job. Even resident board members who have the best interest of the association at heart may lack the experience and industry contacts to do the job. In addition, the association has to deal with board turnover, part-time residents and illness, which can interrupt a project and daily decision-making.

If self-management is still the association’s decision, it will require at least two dedicated and available board members and could require as much as 30 hours a week. These board members should have accounting experience and, if possible, some building experience. Also, whether you are self-managed or hire a professional manager, all associations will need an attorney experienced in Florida condominium law. Finally, there are all kinds of personalities out there and a homeowner who is in charge of an association must have good written and verbal communication skills and a non-abrasive personality.

I’ve personally lived in a condominium association for 20 years and have been fortunate to have a very competent and knowledgeable management company overseeing an equally competent and knowledgeable board for most of those years. But it’s easy for an association to come off the rails because of poor management and homeowner interference. Whatever your association’s decision is about self-management or professional management, stay involved and voice your opinion. It’s the only way to keep your freedom.

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A real estate plateau

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

There is a word that no one who follows an active real estate market wants to hear, and that word is “plateauing.” What does that mean in real estate lingo? It means leveling out rather than breaking through, and it’s a word that more than one economist has recently used. Before you start looking up at the sky waiting for it to fall, it’s not all bad, and some of it may be good.

According to the National Association of Realtors, existing home sales nationally in March declined 1.2 percent from last year. This translates to the national single-family home median selling price being $250,400 in March, which was 5.8 percent higher than March of last year. The March results were largely in line with economists’ expectations for the housing market this year – not a great performance. As we already know, a limited supply of homes has driven up prices and curtailed sales volume.

The March sales statistics from the Realtor Association of Sarasota and Manatee’s website are also looking a little off in both selling price and sales volume for single-family homes.  The number of closed sales in March of this year was 580 for single-family homes. Last year it was 581, no real change, but there has been a change in the median sale price. After three months of median sales price being at or above $300,000, in March of this year, it was $285,000, a decline of 1.7 percent from last year.

The average sale price for single-family homes in March was $367,268, up 8.4 percent from last year. In addition, the median time to contract was 47 days, a very good number, and we still have only four months of properties available for sale, a very bad number. By comparison, the state of Florida’s median single-family home sale price during March of this year was $250,800, an increase of 8.2 percent from last year.

Condo sales numbers were all around better. The median sale price for this year was $201,500, up 15.1 percent, and the average sale price was $245,563, up 15.7 percent from last March. This March we closed 284 condos compared to last year where we closed 259. The median time to contract was 46 days, a good number, and we are holding at four-and-a-half month’s supply of available properties, a bad number.

It’s pretty much the same old story – too little inventory is pushing prices up overall and keeping properties off the market. The low number of days for both single family and condos on the market before going to contract proves this. With interest rates starting to go up, keeping fewer buyers in the market, something will have to give, which is why we may be seeing a leveling off.

But there is good news too. It appears that Florida is one of a handful of states in the country that are importing vast numbers of residents from other states. Since 2007, Florida has gained 850,000 residents. Texas, another state without income tax, has gained 1.4 million. Combined, Florida and Texas have gained a net of $50 billion in income and purchasing power from other states. Compare this to California and New York, which have given up a combined net of $23 billion, and this does not include other states like Connecticut, New Jersey, and Minnesota, which have consistently lost residents. Economists predict this exodus will only continue when the tax cut bill fully takes effect, capping state income tax at $10,000.

Will the influx of residents from out-of-state keep our real estate market from plateauing or are we going to start feeling a little pain? Like everything in real estate, stay tuned.