Pending Home Sales Leap 5.5% in February

WASHINGTON (March 29, 2017) — Pending home sales rebounded sharply in February to their highest level in nearly a year and second-highest level in over a decade, according to the National Association of Realtors®. All major regions saw a notable hike in contract activity last month.

The Pending Home Sales Index,* www.nar.realtor/topics/pending-home-sales, a forward-looking indicator based on contract signings, jumped 5.5 percent to 112.3 in February from 106.4 in January. Last month’s index reading is 2.6 percent above a year ago, is the highest since last April (113.6) and the second highest since May 2006 (112.5).

https://www.nar.realtor/news-releases/2017/03/pending-home-sales-leap-55-in-february  

The good ole days……. so they thought

Like any frontier town, Cape Coral’s first businesses included a grocery, a bank, a newspaper and, well, like any Florida frontier town, a realty—aptly named Wonderland Realty, as most early buyers were wondering what they had gotten themselves into. They seemed to be abandoned in the middle of a strip-mining operation. In one direction, nothing but miles of white sand and raw canal banks; in the other, glittering water. They were marooned in “Wonderland.”  more

Southwest Florida’s The Place To Rent To Boomers

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Southwest Florida is a great place for landlords to rent to boomers, according to a report out Thursday by RealtyTrac.

Charlotte County was ninth, Lee 17th and Collier 21st on the ranking of top baby boomer markets nationwide. As might be expected, those counties didn’t place on the Top 50 markets for Millennials.

The ranking was based on gross rental yield, meaning the average rent for a three-bedroom home divided by the median sales price. The study looked at counties with populations of 100,000 or more and at least a 10 percent increase in baby boomers (those born between 1945 and 1964).

Charlotte had a 12.73 percent rental yield and a 34.3 percent increase in boomers from 2007-2013. Lee had a yield of 10.03 and an increase of 27.6 percent in boomers; Collier was at a 6.64 yield and a 24.3 percent jump in boomers.

The top county, Pasco, which is just north of Tampa, had a rental yield of 20.93 percent. It had just an 11.7 percent rise in boomers, but they make up 27 percent of its population. In Lee, 28.1 percent of the population is boomers.

Zillow: Buy A Home In Southwest Florida

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To the age-old question of whether to buy or rent, Zillow has an answer: buy if you live in Southwest Florida.

The Seattle-based real estate data collector says in a recent survey that people in Lee, Collier, Charlotte and Hendry counties have better odds than most of the country of coming out ahead if they buy.

Nationally, buying is a good decision for people who plan to stay in the home for at least two years, according to an analysis of first-quarter financial data.

But what Zillow calls the “breakeven horizon” is much shorter here: 1.1 years for Lee County; 1.0 for Collier; 1.1 for Charlotte; and 0.7 for Hendry.

Commercial real estate agent Jim Garinger of Colliers International Southwest Florida said Zillow’s analysis is borne out by what he sees in the apartment complex market.

“Traditional apartment complex occupancy has become stronger over the past 12 months or so,” he said. “There’s been a significant increase across the board but especially in Class B apartments.”

As that’s happened, rents have increased as well, Garinger said.

The average apartment complex in the Fort Myers area in March had a vacancy rate of 96.7 percent, up 1.8 percent from March 2013, according to Carrollton, Texas-based ALN Apartment Data.

In the same period, the average monthly rent rose 7.9 percent to $920, ALN’s report says.

Even as occupancy rates and values rise for apartments, however, lenders are still skittish about financing multi-family housing, Garinger said.

“Lenders are still looking at comparable sales as distressed properties,” which makes them reluctant to finance purchases or new construction, he said.

That problem will resolve itself with time, Garinger said, but meanwhile “If you’re a renter, it’s a great time to buy if you can swing it. As occupancy rates increase, rents are increasing as well.”

Home prices are also going up and interest rates are still historically low, contributing to the advantage of buying, he said.

There’s no shortage of prospective home buyers.

The share of Americans who own their homes was 64.8 percent in the first quarter, down from 65.2 percent in the previous three months, the Census Bureau said. The rate is the lowest since the second quarter of 1995, when it was 64.7 percent.

Average Home Upsized Post-Recession

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The average new-home size has increased more than 300 square feet since 2009, growing from 2,362 square feet in 2009 to 2,679 square feet in 2013, according to recently released Census Bureau data.

With that added square footage, new homes are adding more bedrooms, bathrooms, and amenities than they had in 2009.

Forty-eight percent of homes built in 2013 had four bedrooms compared to 34 percent with that number in 2009.

Thirty-five percent of homes in 2013 had three or more full baths compared to 23 percent in 2010.

Also, homes today are also accommodating more garage space. Twenty-two percent of homes built in 2013 had garage space to fit three cars or more compared to 16 percent in 2010.

The amenities that builders say they are most likely to include in new homes are a walk-in closet in the master bedroom, low-e windows, a laundry room, and a great room, according to the National Association of Home Builders. Amenities favored by many builders are granite countertops, double sinks, and a central island in kitchens, as well as nine-foot or higher ceilings, a front porch, exterior lighting, and a patio.

Bigger homes are also meaning higher prices. The average sales price rose from $248,000 in 2009 to $318,000 in 2013.

At the bottom of the list of features that builders will include in new homes in 2014, according to NAHB: laminate kitchen countertops, an outdoor kitchen, an outdoor fireplace, a sunroom, a two-story foyer, and a whirlpool in the master bathroom.

More Home Owners Tap Into Equity Again

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A wave of home owners reportedly are borrowing against their home’s equity once again as home prices rise.

“After a home equity credit binge during the housing bubble, banks shut off the tap as home prices plummeted,” the Los Angeles Times reports. “Sobered home owners stopped viewing equity as free money for cars, vacations, and college educations.”

But home equity lines of credit are back on the rise. Bank of America said that its home equity business rose 75 percent last year compared to 2012. In the fourth quarter, BofA reported it issued $1.9 billion in new home equity credit lines, up from $1 billion a year earlier.

The most popular use of equity lines is home improvement, followed by debt consolidation, says Kelly Kockos, Wells Fargo’s senior vice president of home equity. Some borrowers are also using the credit to buy a second home.

Home equity lines of credit are a second mortgage with a type of variable rate that can allow home owners to borrow up to a pre-set amount. For example, a home owner with a $200,000 first mortgage on a $400,000 house could opt to take out a $100,000 line of credit. “If the home owner borrowed the maximum, the mortgage debt would total $300,000 — 75% of what the house would bring in a sale,” The Los Angeles Times explains.

While home equity lines of credit are back on the rise, lenders say they are not as easy to get as they once were. Home owners getting approved tend to have higher credit scores and must show ample savings and equity in their homes, lenders say.

Market Neither Boom Nor Bust

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Southwest Florida experienced an unfamiliar new type of real estate market in 2013: a relatively normal one.

But that doesn’t mean the market’s immune from forces that could push it into either boom or bust.

Those were the conclusions of three real estate authorities who presented their takes on the year Tuesday night at The News-Press Market Watch: Focus on Real Estate.

Speaking before a sold-out crowd of about 900 at Harborside Event Center in downtown Fort Myers, presenter Randy Thibaut of Land Solutions said it’s important to look at what’s actually happening now, not the giddy feelings people have now the recession’s fading.

“There’s a lot of myth, a lot of boom, all kinds of things going on in the market. So I’m going to focus in on the facts,” said Thibaut, who specializes in sales and development of large tracts of land.

Southwest Florida’s real estate market has had “the frat party and the hangover” in the wild swings of the past 14 years, and now it’s moving into a new phase, presenter Denny Grimes of Denny Grimes & Co. and Royal Shell Real Estate told the crowd.

Now, he said, nine years after the boom ended, the area’s real estate market has returned to something approaching normal, and that’s a good thing.

“You generally don’t get that opportunity this soon” after a meteoric rise followed by a violent contraction, Grimes said.

There’s little likelihood the recovery will turn into a bubble of unwarranted speculation, Grimes said. “We would need four years of 20 percent increases to get to peak value. We are nowhere near a bubble.”

The retiring baby boom generation will fuel future growth, he said, because this area is an attractive retirement venue. “We offer water, warmth and way of life.”

Grimes predicted a sustainable real estate industry is on the horizon, saying that “2014 will usher in a rational boom” for at least five years.

But the presenters didn’t sugar coat the problems still lingering from the recession.

Financing, for example, is still hard to get from lenders who were burned by the sharp drop in values that followed the boom, said presenter Stan Stouder, a founding partner of CRE Consultants who handles commercial property sales and leasing.

“Why do they call it funding?” Stouder cracked. “There’s nothing fun about getting a loan today. They want you to guarantee every deal 100 percent.”

The deals that were made in Lee County in 2013 by and large were done without a lender’s help, he said. “Sixty-five percent of the commercial real estate deals had no financing at all.”

Thibaut noted that labor costs are rising because of an acute shortage of skilled tradesmen. Many qualified workers moved away after building slowed to a crawl after the boom ended.

“We’ve got to do something” to lure them back at a faster pace, he said.

But there are limits to the most careful planning and predicting, Thibaut said. “Predicting the future of where our home building industry’s going to go is like predicting where a hurricane’s going to go.”