Low Inventory Impacts Market

ScottSorensonRealEstate.Com             Naples, Fla. (September 19, 2014) - "We can't sell what's not there," was a phrase repeated among several brokers as they analyzed a recent report tracking August home sales activity released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island). Overall inventory dropped 20 percent in the $300,000 and below price category in August 2014 compared to August 2013. The median price in this price category rose 13 percent as a result. The pending and closed sales dropped double digits in the same price segment August 2014 compared to August 2013, factors that illustrate the economic law of supply and demand.   Low inventory was also a strong factor in the decrease of pending and closed sales activity in the Naples Beach area condominium market. This much-sought after location experienced a 28 percent decrease in available inventory from 571 condominiums to 409 condominiums in August 2014 compared to August 2013. The low inventory contributed to the 31 percent decrease in pending sales and 23 percent decrease in closed sales of condominiums in this area. And, the median closed price in this area increased 7 percent from $495,000 in the 12-months ending August 2013 to $530,000 in the 12-month ending August 2014.   "I thought we had seen the top of this economic cycle a year ago," said Cindy Carroll, SRA, with the real estate appraisal and consultancy firm Carroll & Carroll, Inc., referring to unpredictable activity in certain areas within Collier County. "Our local market is extremely diverse. For example, in Pelican Bay there is a three month inventory of single family homes for sale, but if you are looking to buy a Crayton Road area condo in the $2 to $3 million price range, you'd better be ready with a checkbook because there are only two listings."   Brenda Fioretti, Managing Broker at Berkshire Hathaway HomeServices Florida Realty, pointed out that the report also showed financed sales had increased 30 percent since NABOR® starting tracking overall cash versus conventional (financed) sales in January 2013. "We are starting to see an increase in the number of homes being financed by qualified buyers."   The NABOR® August 2014 Report provides comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary. The NABOR® August 2014 sales statistics are presented in chart format, including these overall (single-family and condominium) findings: Overall pending sales decreased 11 percent from 890 homes in August 2013 to 795 homes in August 2014. Overall closed sales decreased 2 percent from 9,798 homes in the 12-months ending August 2013 to 9,613 homes in the 12-months ending August 2014. The overall median closed price increased 14 percent from $228,000 in 12-months ending August 2013 to $260,000 in the 12-months ending August 2014. Overall inventory decreased 8 percent from 3,875 in August 2013 to 3,579 in August 2014. Average days on market were 83 for August 2014. Inventory for single family homes increased 1 percent from 1,894 homes in August 2013 to 1,904 homes in August 2014. The largest increase was in the $300,000 - $500,000 price category, which saw a 12 percent increase. Closed sales for condominiums decreased 1 percent from 5,137 condominiums in August 2013 to 5,066 condominiums in August 2014. Several brokers agreed with Phil Wood, President & CEO of John R. Wood Realtors, who said, "We'll have to see if the low inventory will continue to be a trend in the coming months."   The August report reflects inconsistent activity across all geographic areas making it difficult to predict whether the low inventory will continue to affect pending and closed sales moving forward. Additionally, another factor not tracked in the report but one that impacts pending homes sales is new construction, which continues to swell in the area. However, the rising inventory of newly constructed homes will not help those buyers looking for homes in the under $300,000 price category because there are few available.   "This is a very diverse market with a diminishing inventory in the reasonably priced housing sector," said NABOR® President and Corporate Trainer at Downing-Frye Realty Pat Pitocchi. "The increase in median closed price continues to be driven by the under $300,000 market, which comprises nearly 65 percent of existing home inventory. In August, the under $300,000 price segment's overall median closed price increased 13 percent, while all other price categories moved slightly up or down. It's the only area of the market whose median closed price behavior is predictable."   With the complexity of real estate transactions today, compounded by varying price pockets within the diverse Naples geographic areas and the speed at which you need to be ready to make a move, using a Naples REALTOR® to buy or sell a home is the best way to know you have a guide that understands what's best for you. A Naples REALTOR® has the expertise and professionalism to help you make the smartest move at the right time.  Ethics.   View August 2014 Market Statistics    To view the entire report, visit www.NaplesArea.com

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No Summer Vacation for REALTORS® Median Closed Price Increases $35,000

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Naples, Fla. (August 22, 2014) - "Stable" continues to be the adjective real estate experts use to describe the Naples area housing market after analyzing a recent report tracking July activity released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island). Overall pending and closed sales for July increased in all price categories except the $300,000 and under market. The overall median closed price in July increased 16 percent from $225,000 to $260,000; with a 12 percent increase in the $300,000 and under market, from $155,000 to $174,000,driving the overall price increase. 

"Due to demand in the under $300,000 market, which resulted in a 25 percent decrease in that segment's inventory, the market's total inventory in July fell 13 percent," said Phil Wood, President & CEO of John R. Wood Realtors. "However, it's important to note that 15 percent of the total inventory available included 539 newly constructed homes. Our report tracks some new construction activity, typically 'spec' homes, however, it does not include new home inventory being added from the 30 new communities currently under development in the area."

"The report shows us clear inventory decline in the $300,000 and below market," said Wes Kunkle, a commercial broker at Kunkle Realty. "The fact is: we're running out of homes to sell in this price category."

Kunkle continued, the trend can be seen in the statistics, as pending sales for homes under $300,000 decreased at almost the same rate as its inventory. The report also shows new summer trends by neighborhood. In July 2014, the only increase in pending sales of single family homes was in the Naples Beach and South Naples areas. Interestingly, the only area to experience a positive increase in inventory was East Naples.

"Appreciation is one key factor driving prices in the lower end of the market," said Dr. Shelton Weeks, Department Chair of Economics & Finance, Lucas Professor of Real Estate and director of the Lucas Institute for Real Estate Development & Finance at Florida Gulf Coast University. "These homes are in demand and quick to sell."

Brenda Fioretti, Managing Broker at Berkshire Hathaway Home Services Florida Realty, noticed another interesting trend in the July report, "Overall pending sales in the $2 million and above price segment increased 47 percent from 19 homes pending in July 2013 to 28 homes pending in July 2014. For single family homes in this segment and timeframe, pending sales increased 100 percent from 11 to 22; yet pending sales for condominiums in this price segment decreased 25 percent from 8 to 6."

The NABOR® July 2014 Report provides comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary. The NABOR® July 2014 sales statistics are presented in chart format, including these overall (single-family and condominium) findings:

• Overall pending sales decreased 13 percent from 975 homes in July 2013 to 845 homes in July 2014.
• Overall closed sales had no change from 12-months ending July 2013 to 12-months ending July 2014.
• The overall median closed price increased 16 percent from $225,000 in 12-months ending July 2013 to $260,000 in the 12-months ending July 2014.
• Overall inventory decreased 13 percent from 4,086 in July 2013 to 3,562 in July 2014.
• Average days on market were 77 for July 2014.
• Pending sales for single family homes decreased 10 percent from 505 in July 2013 to 453 in July 2014. In the $2 million and above category, pending sales increased 100 percent from 11 in July 2013 to 22 in July 2014.
• Closed sales for single family homes decreased 1 percent for 12-months ending July 2014. However, closed sales increased in all price categories except the under $300,000, which saw a 20 percent decrease.
• The median closed price for single family homes increased 25 percent for the 12-months ending July 2014. However, all price categories above $500,000 saw a decrease in median closed price.
• Inventory for single family homes increased 1 percent. The largest increase was in the $300,000 - $500,000 price category, which saw a 14 percent increase.
• Average days on market for a home in the $300,000 and under category was 50 days in July 2014.
• Pending sales for condominiums decreased 17 percent for 12-months ending July 2014.
• Closed sales for condominiums increased 1 percent for the 12-months ending July 2014. Activity in this area was most impressive in the $1-$2 million price category which had a 25 percent increase, and in the $2 million and above price category which had a 35 percent increase.
• The median closed price for condominiums increased 12 percent for the 12-months ending July 2014.
• Inventory for condominiums decreased 19 percent with all price categories experiencing a drop.
• Average days on market for a condominium in the $300,000 and under category was 56 days in July 2014.
• Average days on market for a condominium in the $2 million and above category was 95 days in July 2014. 

"Traditional sales dominate the market. In July 2014, they increased 35% from 345 in July 2009 to 603 in July 2014," said Carmen Vasquez, owner/broker of US Prime Realty. "There were 330 non-traditional [short sale or foreclosed] home sales in July 2009. In July 2014 there were only 102, a significant reduction."

There were also more closed sales recorded in the first seven months of 2014 (5,952) than there are available in our current inventory (3,563), which NABOR® experts believe is an encouraging message to consumers looking to sell or buy.

 

View July 2014 Market Statistics

  

UCF releases four-year Fla. economic forecast

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ORLANDO, Fla. – July 23, 2014 – Between now and 2017, the University of Central Florida projects an annual economic expansion in the state of 3.7 percent and payroll job creation of 2.6 percent. The projection comes form its quarterly report, the July 2014 Florida Forecast.
Report highlights

• As of May 2014, 41.7 percent of single-family home transactions were cash sales, down slightly from 46 percent one year earlier. It's the fourth year that cash sales were at 40 percent or higher, suggesting that investors continue to play a role in Florida's housing market.
• Housing starts continue their ascent and will be more than double their 2013 levels by 2017. Total starts will be over 95,200 in 2014, just over 136,000 in 2015, 162,700 in 2016 and 166,200 in 2017. This growth in residential construction activity will catalyze growth in the commercial sector and "push employment growth in the construction sector into double-digits.
• Real personal income growth for 2013 slowed to 1.8 percent. From 2014-2017 real personal income growth will accelerate steadily and average 4.2 percent, with 2014 growth at 2.8 percent, which will rise to 5 percent in 2017.
• Low inventories and rising house prices have triggered a surge in home construction. Housing starts will average 31.3 percent growth during 2014-2017. The most rapid growth will be in 2014 and 2015 when starts will grow at an average rate of 51.6 percent.
• Payroll job growth year-over-year should average 3 percent in 2014, 2.6 percent in 2015, 2.7 percent in 2016 and 2.3 percent in 2017. Bye the third quarter of 2015, payrolls should fully recover to their pre- recession highs.
• Labor force growth in Florida will average 2.3 percent from 2014-2017. In the four previous years, it was just 0.9 percent.
• The unemployment rate may not accurately show the increase in jobs as more unemployed Floridians reenter the labor pool. The pace of decline will slow dramatically and could reverse direction at times. Still, the unemployment rate is forecast to fall to 5.6 percent by the end of 2017.
• Underemployment in Florida, a broader measure of labor market weakness than headline unemployment remains at 14.3 percent through the 1st quarter of 2014, down from 19.3 percent in 2010.
• Sectors projected to have the strongest average job growth during 2014-2017: Construction (11.3 percent), Professional and Business Services (4.6 percent), Trade, Transportation & Utilities (4 percent), Education & Health Services (2.5 percent), and Leisure & Hospitality (2 percent).

The full UCF economic report is available online.

February Market Activity Strong, Seasonal Outlook Good

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Naples, Fla. (March 14, 2014) - Over 40 contracts were initiated every day on average in February making it a busy month for Collier County REALTORS® according to the February 2014 Market Report released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island).  Overall pending and closed sales increased 5 percent each from 10,629 pending sales in the 12-months ending February 2013 to 11,151 in the 12-months ending February 2014, and 9,308 closed sales in the 12-months ending February 2013 to 9,735 in the 12-months ending February 2014.

Overall closed sales decreased 5 percent in the $300,000 and below price segment, which encompasses almost two-thirds of the existing home sales market, from 6,149 in the 12-months ending February 2013 to 5,823 in the 12-months ending February 2014.  Conversely, the February report showed a 20 percent increase in closed sales for all homes over $300,000 from 3,159 closed sales in the 12-months ending February 2013 to 3,912 for the 12-months ending February 2014.  The largest decrease in inventory continues to be in the $300,000 and below price segment which saw a 20 percent decrease versus a 12 percent decrease in inventory for all other price segments combined.

"Homes under $300,000 made up 66 percent of the market in 2013 but we are starting to see that figure decline in 2014," said Pat Pitocchi, NABOR® president and corporate trainer at Downing-Frye Realty.  "Two factors are driving this change: median closed prices are going up and pushing these homes into a higher price category; and non-traditional sales [short sales and foreclosures] are disappearing."

As the report demonstrated, of the 670 homes that closed in February 2014, only 82 were non-traditional sales.  That's a 10 percent decrease from a year ago when 687 homes closed in February 2013, of which 152 were non-traditional. 

The report continued to show the majority of activity occurred on either end of the market with the middle market showing stability.  Overall median closed prices for homes $300,000 and below increased 14 percent from $145,000 in the 12-months ending February 2013 to $165,000 for the 12-months ending February 2014, while overall median closed prices for homes $2 million and above increased 7 percent from $2,805,000 in the 12-months ending February 2013 to $3,000,000 in the 12-months ending February 2014.  Yet for homes priced in between these two price categories (i.e., $300,000 - $2 million) the report shows virtually no change in overall median closed prices from the 12-months ending February 2013 to the 12-months ending February 2014.

The NABOR® 2014 February Report provides comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary. The NABOR® February 2014 sales statistics are presented in chart format, including these overall (single-family and condominium) findings:

• Closed sales for condominiums in the $2 million and above price category increased 102 percent from 55 in the 12-months ending February 2013 to 111 in the 12-months ending February 2014.
• Median home prices in the under $300,000 single-family home market rose 15 percent from $155,000 in the 12-months ending February 2013 to $179,000 in the 12-months ending February 2014.
• Overall Days on Market is at 94 for February 2014.
• Overall median closed price increased 17 percent from $210,000 in the 12-months ending February 2013 to $245,000 in the 12-months ending February 2014.
• Overall inventory decreased by 15 percent from 5,443 properties in February 2013 to 4,633 properties in February 2014.
• Pending sales in the condominium market rose 6 percent from 5,356 properties in the 12-months ending February 2013 to 5,696 properties in the 12-months ending February 2014. 

Steve Barker, Advising Broker for Equity Realty, and Carmen Vasquez, owner/broker of US Prime Realty, agree and contend that the 2014 season has been one of the busiest ever. 

"We are experiencing multiple offer situations for homes priced on either end of the market," said Vasquez.  Barker added, "People are not getting a second chance to take a second look at homes for sale in the lower and upper price ranges because that's where the majority of sales activity is happening right now. Buyers must make quick decisions to avoid losing the home they want."

Mike Hughes, Vice President and General Manager of Downing-Frye Realty summed up real estate activity by stating, "This season is turning out to be good for both buyers and sellers.  Basically what the report is telling us is that inventory remains tight and pricing steady.  As a result, buyers must act fast.  The home you look at today may likely be gone tomorrow, so it's important to have a professional REALTOR® partner on your side to help you identify value; negotiate a fair price, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment; and avoid missing a great opportunity."

 

View February 2014 Market Statistics

To view the entire report, visit www.NaplesArea.com

Paradise in Demand: 2013 Solid Year for Real Estate

ScottSorensonRealEstate.Com

NAPLES, FL - All signs point to stabilization for the local housing market as evidenced in the 2013 Annual Market Report released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island). Overall pending and closed sales for homes over $300,000 increased by double digits in 2013.

"The first sign of stabilization can be seen in the increase of traditional closed sales for 2013," said Pat Pitocchi, NABOR® President and Corporate Trainer at Downing-Frye Realty. "At the beginning of the year, 74 percent of sales were traditional, while 26 percent were non-traditional [short sale and foreclosed properties]; but by December, traditional sales rose to 83 percent of all sales leaving 17 percent as non-traditional."

"This report indicates a tremendous market shift from home sales in the under $300,000 category to home sales in the over $300,000 categories," said Bill Coffey, Broker Manager of Amerivest Realty Naples. "Sales over $300,000 now drive the market. Closed sales of homes in the over $300,000 price categories increased by 22.5 percent in 2013."

According to the report, the overall housing market inched ahead of activity reported in 2012, which was considered a recovery year by market expert Cindy Carroll, SRA, with the real estate appraisal and consultancy firm Carroll & Carroll, Inc. Overall median prices for properties between $300,000 - $2 million leveled off in 2013 with little or no change. However, median prices in the lower-end (under $300,000) and higher-end ($2 million+) increased 16 and 5 percent, respectively.

"The report shows a clear and steady demand for housing in Naples," said Glenn Ginsburg, Broker/Owner of A Delta Realty of Naples, Inc. "The condo market was especially hot in 2013 with the most impressive activity in the $2 million and above category, which realized a 62 percent increase in closed sales from 60 units sold in 2012 to 97 units sold in 2013."

The NABOR® 2013 Annual Report provides comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary. The NABOR® Annual 2013 sales statistics are presented in chart format, including these overall (single-family and condominium) findings:

• Overall closed sales in both the $300,000 - $500,000 and $2 million and above segments increased 27 percent from 1,366 in 2012 to 1,730 in 2013 and 234 in 2012 to 298 in 2013, respectively.
• Median prices for single family homes in the $300,000 and below category increased by 17 percent from $150,000 in 2012 to $175,000 in 2013.
• Overall inventory decreased by 18 percent from 6,557 properties in 2012 to 5,403 properties in 2013.
• Inventory in the condo market decreased by 23 percent.
• Closed sales in the single-family market rose 1 percent, while closed sales in the multi-family or condo market rose 8 percent.

"The report indicates the housing market is behaving in a normal manner," said Mike Hughes, Vice President and General Manager of Downing-Frye Realty. "The solid incremental growth we experienced in 2013, especially in the middle priced markets, is a good sign our housing market has recovered. Homeowners that want to sell but are sitting on the fence need to understand that the lax lending environment, which created the last spike in prices, no longer exists. Demand for existing homes has increased in all price segments and in all neighborhoods. This may change when new home construction catches up, so now is a good time to call a REALTOR®.".

View 2013 Annual Market Statistics

View 4th Quarter 2013 Market Statistics

View December 2013 Market Statistics

Mortgage tax break expires despite lawmaker support

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WASHINGTON – Jan. 6, 2014 – To the dismay of housing advocates, industry groups, and U.S. legislators, a tax break for distressed homeowners who mortgages were written down expired on Dec. 31.

The 2007 measure exempted borrowers from federal taxes they normally would owe on assistance received from banks, primarily in the form of a seller’s forgiven home loan debt in a short sale.

If a lender approves a short sale that’s $10,000 less than the seller owes on the home, for example, the lender absorbs the $10,000 loss. However, the IRS considers that $10,000 money that the seller made on the deal since he no longer owes as much to the bank. As a result, the IRS expects the seller to report that $10,000 as income – even if he never saw the money – unless Congress extends the tax break.

Although the residential property market is in recovery, housing advocates contend that the market still needs this tax break that was put in place after the crash. More than 6 million homeowners in this country still owe more on their mortgages than the underlying properties are worth, they say, and failure to renew the tax break would only increase their financial burden. A report by the Congressional Research Service calculates that a middle-income homeowner who is granted a $20,000 reduction in mortgage debt could expect to owe $5,600 in federal taxes under the new reality.

“It makes absolutely no sense,” says Sen. Debbie Stabenow (D-Mich.). “This is not just about fairness for homeowners. This is about keeping the housing recovery alive.”

Many of her colleagues agree, given the broad bipartisan support for an extension of the law. While Congress went on holiday break without taking action, it could revisit the issue as soon as next week, possibly passing a retroactive extension.

However, an extension is not guaranteed. Owners considering a short sale currently should seek advice from a professional tax consultant or attorney.

Home prices, rents expected to rise in SW Florida next year

ScottSorensonRealEstate.Com

In real estate, a new report by Cary, N.C.-based research firm Local Market Monitor predicts double-digit growth in both home prices and rents for both Naples-Marco Island and Cape Coral-Fort Myers in 2014.

This partly will be due to inflation, which the firm’s president Ingo Winzer expects will rise from current levels to 3 or 4 percent “fairly soon.”  “Inflation won’t be rampant, but you can’t keep printing money forever,” he said.  But other market forces will also be at play, propelling Southwest Florida to faster home price appreciation and rent growth, the report said.

For Naples-Marco Island, the firm predicts home values will accelerate by 12 percent over the next 12 months, on par with expected statewide increases but a faster pace than the national pace of 8.1 percent.  It’s also faster than the area’s average home price growth of 8 percent, to $268,525, over the last 12 months.

The report forecasts 10 percent price appreciation in both 2015 and 2016.
Though home prices in the metro area have been on the upswing for months, they’re still 19 percent undervalued due to the metro area’s high incomes, Winzer said.

A 1.5 percent increase in population has swelled demand, drawn partly by gains in jobs, particularly in tourism, health care and retail.  Over the past 12 months, jobs have grown by 7.6 percent, compared to a national increase of 1.7 percent.  Increase in demand also is expected to push up rents by 17 percent over the next three years, to an average of $1,273 a month.

“It’s booming for us,” said June Prophet, rental division regional manager for Berkshire Hathaway Home Services in Naples, adding demand is strong for both annual and seasonal rentals in Southwest Florida.  In Cape Coral-Fort Myers, the report forecast home prices will rise by 12 percent over the next 12 months.  Then price growth will moderate to 9 percent in 2015 and 8 percent in 2016.

Currently, average home prices are $176,560, up 12 percent from a year earlier.  Yet demand remains weak, resulting in homes that are underpriced by 26 percent, the report said.  Job growth in the area has lagged Naples-Marco Island at 2.6 percent, but still outpaces the national increase of 1.7 percent.
Population is growing, too, up 2.1 percent last year, though that is far below the peak level of 2005, when a flood of newcomers pushed it up 5 percent year over year.

The report also predicted Cape Coral-Fort Myers rents will rise 13 percent over the next three years, to an average of $1,148 a month.