Monthly Flagler County Waterfront Sales Reports & Florida Realtors® News
Florida Housing Market Report: Sales & Median Prices Up in May
/By Florida Realtors
May was “the highest single-family home sales’ monthly total for any single month in … 10 years," says Brad O'Connor, Florida Realtors chief economist.
ORLANDO, Fla – Florida’s housing market reported increased sales, higher median prices, more pending sales and gains in inventory (active listings) in May compared to a year ago, according to the latest housing data released by Florida Realtors®. Sales of single-family homes statewide totaled 30,742 last month, up 9.6% over May 2018.
FLORIDA HOUSING MARKET UPDATE: MAY 2019
May turned out to be one of the strongest months we’ve seen in a long time for single-family homes in the Sunshine State. We're talking a 9.6 percent increase in sales from May 2018 and our highest monthly total for *any* single month over at least the past 10 years.
“Low interest rates continue to fuel buyer demand in Florida’s housing market,” said 2019 Florida Realtors President Eric Sain, a Realtor and district sales manager with Illustrated Properties in Palm Beach. “In May, new pending sales for existing single-family homes were up 5% year-over-year, while pending sales for existing condo-townhouse properties rose slightly (0.5%). Inventory levels have steadily improved, which offers more choices for homebuyers. Statewide, single-family inventory (active listings) last month rose 4% over May 2018, while condo-townhouse inventory increased 4.8%.
“For expert advice and peace of mind, buyers and sellers should consult a local Realtor to learn more about area market conditions.”
In May, statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for the 89th consecutive month. The statewide median sales price for single-family existing homes was $266,000, up 4.3% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $195,000, up 3.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in April 2019 was $269,300, up 3.7% from the previous year; the national median existing condo price was $251,000. In California, the statewide median sales price for single-family existing homes in April was $602,920; in Massachusetts, it was $394,000; in Maryland, it was $295,000; and in New York, it was $271,000.
Looking at Florida’s condo-townhouse market in May, statewide closed sales totaled 12,217, up 1.6% compared to a year ago. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
“May turned out to be our highest single-family home sales’ monthly total for any single month over at least the past 10 years,” said Florida Realtors Chief Economist Dr. Brad O’Connor. “What’s more, this growth was widespread, with sales increasing in 21 of the state’s 22 metropolitan areas.
“This resurgence in single-family home sales is largely being driven by a single factor, which is that mortgage interest rates have been declining sharply since late last year. It’s worth noting, for instance, that all-cash single-family home sales were actually only up 1.5% in May, whereas transactions involving financing were up over 12%.”
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.07% in May 2019, down from the 4.59% averaged during the same month a year earlier.
© 2019 Florida Realtors
Survey: More Homeowners Think It’s a Good Time to Sell
/By Florida Realtors
If current owners were waiting for rising prices to moderate, it’s time to move. NAR’s latest survey finds 46% believe it’s a good time to sell.
WASHINGTON – The latest consumer findings from a National Association of Realtors® (NAR) survey reveal that many more Americans believe that now is a good time to sell a home.
The second quarter of 2019 saw a jump in optimism in selling – 46% strongly held that belief, up from 37% in the first quarter.
NAR’s chief economist Lawrence Yun says that home prices have increased only moderately and are a contributing factor for the reason a majority feel that now is a good time to sell. “With home price appreciation slowing, home sellers understand that the days of large price gains from holding an extra year are over,” he says.
An increased number of Americans also think it’s a good time to buy a home, and of those respondents, 38% strongly believe that notion, and 27% said they moderately believe it. Thirty-five percent disagreed, however, saying it’s not a good time to make a home purchase, which is unchanged from 2019’s first quarter.
NAR’s second quarter Housing Opportunities and Market Experience (HOME) survey also looked at consumer attitudes regarding the nation’s economy, and 55% said that the economy is improving; up from 53% in the previous quarter. Second quarter optimism was greatest among those who earn $100,000 or more and those who reside in rural areas. Fifty-three percent of Gen Xers said they believe the economy is improving, which is also up from 50% last quarter.
Yun said Gen Xers might have more financial pressures compared to other age groups.
“Many in the Generation X population find themselves needing to purchase multi-generational homes,” he says. “Also, they may be feeling financial stress from caring for aging parents and children of all ages. Nonetheless, they have an optimistic outlook about the future.”
To that point, 63% of Gen Xers believe home prices have increased within their communities in the last 12 months, a slight jump from the first quarter’s 61%.
Respondents were also asked to share their thoughts on future home prices in their neighborhoods, and 43% percent believe prices will remain the same in their communities over the next six months, a figure which is consistent with the previous quarter; 49% expect to see a price increase.
Among those surveyed who do not currently own a home, 27% said they believe it would be very difficult to qualify for a mortgage due to their financial state; 30% said it would be somewhat difficult.
Yun said that mortgage affordability was promising over the second quarter, and he predicts this trend will continue. “Lower mortgage rates, along with job and wage growth, will lead to an increase in sales and thereby contribute positively to economic growth in the upcoming quarters.”
© 2019 Florida Realtors®
Lenders Must Accept Private Flood Insurance Policies After July 1
/WASHINGTON – June 18, 2019 – The threat to home closings during a National Flood Insurance Program (NFIP) shutdown may be muted or nonexistent should Congress fail to extend the program in the future. After July 1, a federal law forces mortgage lenders to accept private coverage if it satisfies criteria outlined in the Biggert-Waters Flood Insurance Reform Act of 2012.
In February, five federal regulatory agencies – the FDIC, Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, National Credit Union Administration and Farm Credit Administration – issued a joint final rule to implement provisions of the Act, which outlines the new private flood insurance mandate and the steps insurance companies and mortgage lenders must follow.
The rule, which takes effect July 1, 2019:
Implements the Biggert-Waters Act requirement that regulated lending institutions accept private flood insurance policies that satisfy criteria specified in the Act
Allows institutions to rely on an insurer's written assurances in a private flood insurance policy stating the criteria are met
Clarifies that institutions may, under certain conditions, accept private flood insurance policies that do not meet the Biggert-Waters Act criteria
Allows institutions to accept certain flood coverage plans provided by mutual aid societies, subject to agency approval
Private flood insurance could be offered as a stand-alone policy or as an endorsement attached to a full property insurance policy. Lenders won't have to verify that a flood policy or endorsement is acceptable, providing it includes the following endorsement: "This policy meets the definition of private flood insurance contained in 42 U.S.C. 4012a(b)(7) and the corresponding regulation."
However, the law also allows a lender to do its own due diligence if it prefers not to rely on the statement.
A full copy of the 90-page order is posted on the U.S. Department of the Treasury's Office of the Comptroller of the Currency website.
© 2019 Florida Realtors®
ATTOM: Dollar value of flips hits 12-year high in 1Q
/IRVINE, Calif. – June 6, 2019 – ATTOM Data Solutions' Q1 2019 U.S. Home Flipping Report, finds that 49,059 U.S. single family homes and condos were flipped in the first quarter of 2019 – down 2% from the previous quarter and down 8% from a year ago. By total number of flips, it's at a three-year low.
"With interest rates dropping and home price increases starting to ease, investors may be getting out while the getting is good, before the market softens further," says Todd Teta, chief product officer at ATTOM Data Solutions. "While the home flipping rate is increasing, gross profits and ROI are starting to weaken, and the number of investors that are flipping is down 11% from last year. Therefore, if investors are seeing profit margins drop, they may be acting now and selling before price increases drop even more."
Flips made up 7.2% of all home sales during the quarter, up from 5.9% in the previous quarter and up from 6.7% year-to-year. It's the highest home flipping rate since Q1 2010.
Homes flipped in Q1 2019 sold at an average gross profit of $60,000, down from an average gross flipping profit of $62,000 in the previous quarter and down $68,000 in Q1 2018. It's the lowest average gross flipping profit since Q1 2016.
The average gross flipping profit of $60,000 in Q1 2019 translated into an average 38.7% return on investment compared to the original acquisition price, down from a 42.5% average gross flipping ROI in Q4 2018 and down from an average gross flipping ROI of 48.6% in Q1 2018 to the lowest level since Q3 2011 – a nearly eight-year low.
Overall, Florida metros and zip codes fell somewhere in the middle of ATTOM's numbers, with only two of note: Eight U.S. zip codes have a flipping rate higher than 30%, and ATTOM found that zip code 33147 in Miami-Dade County had a flipping rate of 32.7%.
In addition, Naples was cited as the U.S. city where it takes the longest time to flip a home – 235 days.
© 2019 Florida Realtors
Fla.’s housing market: median prices, inventory up in 1Q
/Fla.’s housing market: median prices, inventory up in 1Q
ORLANDO, Fla. – May 14, 2019 – Florida's housing market reported higher median prices and rising inventory during the first quarter of 2019, according to the latest housing data released by Florida Realtors®. Rising prices continue to put pressure on many homebuyers despite gains in the inventory of for-sale homes: Closed sales of single-family homes statewide totaled 59,505 in 1Q 2019, down 1.2 percent from the 1Q 2018 level.
"Continuing a trend that we've been seeing for quite a while, median sales prices for both existing single-family homes and for condo-townhouse properties rose in Florida during the first three months of 2019," says 2019 Florida Realtors President Eric Sain, "The state's population continues to increase, our jobs outlook is strong and the economy is growing. In fact, Florida continues to be ranked as the second-best state in the U.S. to do business, according to the 2019 survey of CEOs from Chief Executive magazine."
The statewide median sales price for single-family existing homes in 1Q 2019 was $253,000, up 2 percent from the same time a year ago, according to data from Florida Realtors Research department in partnership with local Realtor boards/associations. The statewide median price for condo-townhouse properties during the quarter was $185,575, up 3.1 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Looking at Florida's condo-townhouse market, statewide closed sales totaled 25,060 during 1Q 2019, down 7.3 percent compared to 1Q 2018. Closed sales typically occur 30 to 90 days after sales contracts are written.
"There was a little hiccup in sales in both December and January due to a temporary rise in mortgage rates, but rates have since fallen to just above 4 percent again, which helped to spur sales in February and March," said Florida Realtors Chief Economist Dr. Brad O'Connor. "This effect will likely continue into the second quarter as folks continue to realize this might be their last chance to upgrade, downsize or buy their first home while rates are near historical lows.
"Price growth, in the meantime, will continue to be less pronounced in 2019 than in recent years, as inventory levels across multiple price tiers continue to trend upward."
In 1Q 2019, the median time to a contract (the midpoint of the number of days it took for a property to receive a sales contract during that time) was 51 days for single-family homes and 53 days for condo-townhouse properties.
Inventory was at a 4.2-months' supply in the first quarter for single-family homes and at a 6.3-months' supply for condo-townhouse properties, according to Florida Realtors.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.37 percent for 1Q 2019, up from the 4.27 percent average recorded during the same quarter a year earlier.
To see the full statewide housing activity reports, go to Florida Realtors Research & Statistics section on floridarealtors.org. Realtors also have access to local market stats (password protected) on Florida Realtors' website.
© 2019 Florida Realtors®
Fed agencies propose private flood insurance fix
/WASHINGTON – Jan. 31, 2019 – The National Flood Insurance Program (NFIP) is in trouble. Thanks in part to a multitude of national disasters, the program has paid out far more money than it's taken in by way of premiums but hopes of a federal fix through legislation has been delayed so far. Instead, Congress has authorized a series of short-term delays rather than tackling a broader reform package.
A move by the Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency late last week could be the first step in attacking the problem from a different direction, though.
The rule proposal would make private flood insurance more available in flood zones, but it's not official yet – it still needs three other federal regulators, including the Federal Reserve, to sign off on it. It also doesn't tackle all the important issues for homeowners and buyers.
"It appears that regulators are attempting to adopt, by rule, a portion of what was contained in an earlier bill (Ross-Murphy)," says Trey Goldman, Florida Realtors® legislative counsel in the Office of Public Policy. "Under this proposal, banks must recognize and accept private flood coverage. But the bill's 'continuous coverage' language is just as important to homeowners, and the proposed regulations really don't address that. Without continuous coverage, policyholders who leave the NFIP and later come back could be subject to a full risk rate instead of their previous subsidized rate."
Under the FDIC/Comptroller proposal, lenders would have to accept private flood insurance policies if they offer coverage at least as comprehensive as NFIP. Lenders would also have an option to accept private flood insurance policies that don't offer as much coverage as NFIP, which the insurance industry and others want.
Still, any increase in private policy acceptance by lenders offers a ray of hope for homeowners and buyers, in part because a private policy often costs less.
"This ruling has the potential to open up the private insurance market," Michael Barry, a spokesman at the industry-funded Insurance Information Institute told The Wall Street Journal.
Federal law doesn't generally recognize private flood policies. Owners who leave NFIP and return – perhaps because their new cheaper coverage suddenly becomes more expensive later – can lose their grandfathered status under "continuous coverage" if they return to NFIP. If that happens, they often find themselves stuck with two bad choices: Stick with their current private policy that now has a higher premium or return to NFIP and also pay a higher premium because their coverage is no longer subsidized.
Another problem: Some lenders will accept private flood insurance coverage but some do not. For the latter, a homebuyer only has two choices – take out NFIP coverage or find another lender.
Ideally, Congress will address the "continuous coverage" risk when it updates NFIP, which now expires on May 31, 2019.
Source: The Wall Street Journal, Lalita Clozel
© 2019 Florida Realtors®
Realtor.com: More online listings cutting prices
/SANTA CLARA, Calif. – Jan. 30, 2019 – Realtor.com's January housing report shows the U.S. housing market is off to a slower start in 2019. Although home prices continue to increase, 15 percent of U.S. listings had price cuts in January, and declines in days-on-market have significantly decelerated since last year.
"Although the market is slowing, it's important to remember that we're coming off of four straight years of inventory declines that pushed the market to a record low availability of homes for sale," says Danielle Hale, chief economist for realtor.com. "The real metric to keep an eye on is entry-level homes, which are the key to getting today's market back in balance. These homes are still in short-supply."
Note: Realtor.com analyzes listings' asking prices – not selling prices – and the statistics come only from an analysis of homes advertised on realtor.com's website.
Florida metro listing price changes
Tampa-St. Petersburg-Clearwater: Year-to-year inventory is up 21%; total share of price reductions up 3%; listing prices unchanged
Jacksonville: Year-to-year inventory is up 18%; total share of price reductions up 3%; listing prices down 3%
Orlando-Kissimmee-Sanford: Year-to-year inventory is up15%; total share of price reductions up 6%; listing prices unchanged
Miami-Fort Lauderdale-West Palm Beach: Year-to-year inventory up 12%; total share of price reductions is up 1%; listing prices down 1%
Nationally, the share of homes which had year-to-year price cuts increased by 2 percent, and 39 of the 50 largest markets saw an increase in their share of price reductions compared to last year. Las Vegas saw the greatest increase in January, up 16 percent, followed by San Jose (+9 percent), Seattle (+8 percent), Orlando (+6 percent) and Phoenix (+5 percent).
Time on market increases
Nationally, homes sold in 87 days in January – two days faster than last year – but the rate of decline has been decelerating.
In January 2018, homes sold a full week faster compared to the previous year, but in the 50 largest U.S. metros, the typical home spent an average of one more day on the market compared to the previous year. In top-change San Jose, Calif., for example, homes spent 27 more days on the market than they did a year earlier.
Inventory
The median U.S. listing price grew 7 percent year-over-year to $289,300 in January, which is slightly less than last year's increase of 8 percent. This moderate deceleration in home prices is likely attributed to inventory growth in the upper tier of the nation's most expensive markets.
The number of homes priced $750,000 and above grew 12 percent over last year, while the number of homes $200,000 and under declined by 6 percent.
© 2019 Florida Realtors®
NAR: U.S. pending home sales dip 2.2% in Dec
/WASHINGTON – Jan. 30, 2019 – Pending home sales declined in December, but for the second straight month, the Western region experienced a slight increase, according to the National Association of Realtors®(NAR).
The Pending Home Sales Index (PHSI) – a forward-looking indicator based on contract signings – decreased 2.2 percent to 99.0 in December, down from 101.2 in November. Additionally, year-over-year contract signings fell 9.8 percent, making December the twelfth straight month of annual decreases.
Lawrence Yun, NAR chief economist, cites several reasons for the decline in pending sales.
"The stock market correction hurt consumer confidence, record high home prices cut into affordability and mortgage rates were higher in October and November for consumers signing contracts in December," Yun says.
All four major regions experienced a year-to-year decline compared, with the South, an area that includes Florida, sustaining the largest decrease.
However, the partial government shutdown didn't cause any obvious damage to home sales, Yun says, but another shutdown could. "Seventy-five percent of Realtors reported that they haven't yet felt the impact of the government closure. However, if another government shutdown takes place, it will lead to fewer homes sold."
The end of the partial shutdown may even be beneficial to the housing industry, according to Yun. As the government reopens, more mortgage options will become available, and while "some home transactions were delayed, we now expect those sales to go forward."
Despite the low home sales in December, Yun is confident the housing market will see improvement in 2019.
"The longer-term growth potential is high," he says. "The Federal Reserve announced a change in its stance on monetary policy. Rather than four rate hikes, there will likely be only one increase or even no increase at all. This has already spurred a noticeable fall in the 30-year, fixed-rate for mortgages. As a result, the forecast for home transactions has greatly improved."
December pending home sales regional breakdown
The PHSI in the Northeast rose 2.0 percent to 93.2 in December and is now 2.5 percent below a year ago. In the Midwest, the index fell 0.6 percent to 97.5 in December – 7.2 percent lower than December 2017.
Pending home sales in the South fell 5 percent to an index of 109.7 in December, which is 13.5 percent lower than a year ago. The index in the West increased 1.7 percent in December to 88.4 and fell 10.8 percent year-to-year.
© 2019 Florida Realtors®
Fla. consumer confidence fairly steady in Jan.
/GAINESVILLE, Fla. – Jan. 29, 2019 – Consumer sentiment among Floridians fell three-tenths of a point to 97.8 in January from a revised figure of 98.1 in December. It's down 3.5 points year-to-year.
Of the five components that make up the index, two decreased and three increased.
Current conditions
Floridians' opinions about current economic conditions were mixed. Perception of one's personal financial situation now compared with a year ago increased 6.1 points from 88.1 to 94.2 – the greatest increase of any reading this month. This opinion is shared by all Floridians across sociodemographic groups but is stronger among those with incomes under $50,000.
On the other hand, opinions as to whether now is a good time to buy a major household item, such as an appliance, showed the greatest decline in this month's readings, moving from 109.6 to 99.8 – a change of 9.8 points. This opinion is shared by all Floridians but is stronger among women and those aged 60 and older.
"Although these two components of the index moved in opposite directions, together they showed that opinions regarding current economic conditions deteriorated among Floridians in January," says Hector H. Sandoval, director of the Economic Analysis Program at UF's Bureau of Economic and Business Research.
Future conditions
Outlooks about future economic conditions were also mixed. Expectations of personal finances a year from now increased three points from 106 to 109, but anticipations of U.S. economic conditions over the next year decreased nine-tenths of a point from 94 to 93.1.
Finally, expectations of U.S. economic conditions over the next five years increased slightly, moving two-tenths of a point higher, from 92.8 to 93.
"The pessimistic views about the short-term outlook on the U.S. economy are not shared by all Floridians," says Sandoval. "Those aged 60 and older and those with incomes under $50,000 maintain strong positive expectations. Furthermore, even though this component of the index decreased, overall expectations about future economic conditions increased in January. Most of the pessimism stems from the negative expectations regarding Floridians' opinions as to whether now is a good time to buy a big-ticket item."
During the last year, after seeing the realized and expected labor market conditions and inflation, the Federal Open Market Committee increased the target range for the federal funds rate. In June, the committee increased the range to 1.75 to 2 percent, in September to 2 to 2.25 percent, and in December to 2.25 to 2.5 percent.
"Although these changes in the federal funds rate might take time to spread through the economy, they are gradually increasing the cost of borrowing by affecting other interest rates such as bank loans, mortgages and credit cards," says Sandoval. "As a result, they might explain some of the changes observed regarding the opinions as to whether now is a good time to buy a major household item."
Forecast
Florida's economic conditions remain favorable, with more jobs added in December.
According to the latest report from the Florida Department of Economic Opportunity, the state gained 231,200 jobs over the year in December, an increase of 2.7 percent. Among all industries, education and health services gained the most jobs, followed by leisure and hospitality, professional and business services, and construction. The unemployment rate was 3.3 percent, unchanged from the November rate, and closer to the historical observed minimum of 3.1 percent in March 2006.
"Despite the slight decline, consumer sentiment continued to be high in Florida. In view of the realized economic outlook, particularly in the labor market, it is unlikely that federal funds rate changes will undermine the current economic expansion," says Sandoval.
© 2019 Florida Realtors®
Florida Realtors Real Estate Trends: No home price bubble
/ORLANDO, Fla. – Jan. 25, 2019 – To Realtors, homeowners and others who ask, "Are we in another house price bubble?" – the answer is "No," according to Dr. Len Kiefer, Freddie Mac deputy chief economist, who spoke to a crowd of more than 400 Realtors at the 2019 Florida Real Estate Trends summit Thursday during Florida Realtors Mid-Winter Business Meetings.
Kiefer said he and other analysts have been researching home price growth trends and other economic factors to answer the "bubble" question.
"Home prices are up, but that by itself is no indication of a bubble; you need an element of speculation or credit financing involved as well," he said. "We looked at credit, capacity and collateral. In the mortgage space, credit has not expanded in anything like we saw a decade ago. As a result, the default potential rate is pretty low. And we clearly don't see the types of financing products that pushed the dynamics then."
While incomes are up, they're not matching the pace of rising home prices, he noted.
Still, mortgage debt payments as a percentage of disposable income has declined significantly, largely due to lower mortgage interest rates.
"In the downturn, people were taking on a lot of debt, which in turn pushed up prices," Kiefer said. "Now, looking at total mortgage debt compared to equity, we're not seeing that kind of speculation or problem."
He added, "So, when I'm asked about a bubble, I do say no – but the way I pause before I say no has been extending a bit as home prices continue to rise more than incomes. However, in our view (Freddie Mac economists), house prices will moderate as mortgage rates rise."
So, what's ahead for the U.S. economy and housing market in 2019?
"Employment and a little bit of income growth will be key to supporting homebuyer demand," Kiefer said. "Inflation is going to drive the Federal Reserve policy. It's been pretty tame the past few months. We at Freddie Mac expect one to two rate hikes in 2019 as opposed to the four hikes in 2018, though that will be data-dependent."
The general U.S. economy should experience modest growth, he said, while mortgage interest rates should gradually rise throughout the rest of the year and be somewhere around 5 percent by the end of the year – about a 1/2 percentage point rise from the current rate.
"When interest rates rise, the housing market responds pretty negatively and home sales go down," Kiefer said. "But looking ahead to spring, we should see stabilization of home sales and modest growth in the U.S. economy. Our forecast nationally is for housing prices to moderate substantially over the next few years. However, one of the biggest challenges for the overall economy is a lack of new housing supply."
2019 economic forecast for Florida
Florida Realtors Chief Economist Dr. Brad O'Connor discussed the outlook for Florida's economy and housing market in the coming year. In terms of job growth, Florida has done better than the U.S. for the past few years (since 2013) and ended 2018 with an annual job growth rate of 3.3 percent compared to the U.S. figure of 1.9 percent, he said. The state's population growth has not yet returned to the 2 percent annual growth rate it had before the downturn, but the latest Census figures show a 1.5 percent population growth rate from 2017-2018, ranking Florida No. 5 among states.
Looking at Florida's price growth trends for single-family homes, the market is bifurcated, he noted.
"We're finding that different price tiers are definitely appreciating at different rates," O'Connor said. "The range up to $200,000 is up almost 12 percent (in price growth), while the range of $600,000 and over has less growth. There's a lack of affordable housing supply in the lower price tier, while the upper levels are almost a balanced market."
Lack of new housing supply is constraining the market and more construction is needed, he said. However, construction is hampered by a shortage of skilled construction workers, rising cost of materials, lack of land available and other factors.
In good news for Florida's housing market, active inventory at the end of 2018 was up compared to the end of 2017.
O'Connor added, "For perspective, it's not a significantly huge increase in active inventory: it's up 13.3 percent for existing single-family homes and up 8 percent for condo-townhouse properties. And, it's notable that the $200,000 to $300,000 price tier of housing inventory is up, which is the sweet spot for millennials. Despite the fact that we have slightly higher inventory, closed sales are also still rising (with the exception of December's data). Rising inventory is, so far, a good thing."
With current data showing that Florida is outpacing the nation in terms of home sales and employment growth, he forecasts that 2019 should see about a 1 percent growth in home sales and maybe 3 to 4 percent price growth. That's in contrast to the National Association of Realtors' (NAR) forecast for national home and condo sales to remain relatively flat in 2019.
Florida's water issues
While the housing market and economy were the focus of the first half of the event, the second half focused on Florida's water quality issues.
"We may not be the solution, but we can be a big part of raising awareness and educating ourselves and others about Florida's water quality issues," said 2019 Florida Realtors President Eric Sain, Water quality experts speaking at the summit included Dr. Paul Julian, Office of Ecosystems Projects, Florida Department of Environmental Protection (DEP); Dr. Greg DeAngelo, deputy director, Division of Environmental Assessment and Restoration, DEP; and Dr. Kate Hubbard, research scientist, Florida Fish and Wildlife Conservation Commission-Fish and Wildlife Research Institute (FWC-FWRI).
Hubbard, who leads the harmful algal bloom monitoring and research program, provided an overview of red tide and explained how the monitoring and research program works. Red tide is a marine (seawater) harmful algal bloom while blue-green algae is a freshwater bloom.
"The toxins in red tide kill fish, birds, sea turtles, manatees and dolphins," she explained. "Then there are health impacts on humans, Filtering shellfish, like clams, oysters and mussels, accumulate the toxins and can cause neurotoxic shellfish poisoning in human consumers. This toxin also is carried in aerosol form in sea spray and causes respiratory irritation in humans."
Red tide blooms begin 10-40 miles offshore, in deep water, Hubbard said. It is ecologically flexible, with a high tolerance for different temperatures and levels of salinity. It also can use many different sources to fuel its growth, including dead fish.
"A huge network of people helps in monitoring and researching red tide," she said. "Red tide has been occurring for centuries. Strategies to improve resilience and mitigation are continually being evaluated, created and implemented."
Realtors and others can check on red tide on a daily basis by going to myfwc.com/redtidestatus.
The Miami Association of Realtors®was the title sponsor for the 2019 Florida Real Estate Trends event; co-sponsors included the Realtors®of the Palm Beaches and Greater Fort Lauderdale; the Northeast Florida Association of Realtors®; Orlando Regional Realtor®Association; and the Royal Palm Coast Realtor®Association.
© 2019 Florida Realtors®
Remodeling Magazine releases 2019 Cost vs. Value Report
/WASHINGTON, D.C. – Jan. 23, 2019 – Remodeling Magazine released its 32nd annual Cost vs. Value Report, which compares the cost of popular remodeling projects to how much the investment will improve a home's resale value.
The 2019 report surveyed more than 3,200 real estate professionals about returns for 22 projects in 136 U.S. markets, an increase from 100 markets last year. The full report is posted online.
For all projects, the overall cost-to-value ratio is 66.1 percent, which is slightly ahead of last year but well below the decade-high of 71.2 percent in 2014.
As in prior years, there are significant variations in different regions. The average payback nationwide for the 22 projects in the 2019 Cost vs. Value report ranges from a high of 123.8 percent for a garage door replacement in the Pacific region, to a low of 45.0 percent for an upscale master suite addition in the mid-Atlantic region.
"With the increasing costs of building materials and labor, we urge remodelers to think like real-estate professionals first," says Clayton DeKorne, editor-in-chief of Remodeling Magazine. "When you adjust your focus to think like a broker first, you can dull clients' No. 1 pain point – cost – with a discussion of the amount that can be recouped, then go on to show them how to think like a remodeler by raising their understanding and appreciation of the total value, not just resale value, of a home."
Due in large part to sharp increases in material costs, the percentage of costs recouped at sale time is trending downward for all the replacement projects. Material costs tend to comprise a greater proportion of replacement projects compared with larger indoor remodels, however, which have a higher percentage of labor costs.
2019 top 10 projects by percentage of cost recouped
Garage door replacement (97.5%)
2Manufactured stone veneer (94.9%)
Mid-range minor kitchen remodel (80.5%)
Wood deck addition (75.6%)
Siding replacement (75.6%)
Steel entry door replacement (74.9%)
Vinyl window replacement (73.4%)
Fiberglass grand entrance (71.9%)
Wood window replacement (70.8%)
Composite deck addition (69.1%)
Highlights from 2019 report
1.Rising materials costs impact rates of returnWhile the overall changes are modest, the latest Cost vs. Value report reflects the robust market the remodeling industry has enjoyed over the past year. But costs have correspondingly increased, and in some cases, significantly so. These increases are likely due to the tariffs that have roiled commodity markets, which have led to a slight downturn in the percentage of costs recouped for some projects; but overall, returns are up slightly compared to last year.
2.Curb appeal projects continue to provide the highest returns
Nine out of the top 10 high-return projects are exterior replacement – or high curb appeal – projects. The three exterior projects with the highest recoup on investment are garage door replacement (97.5%), manufactured stone veneer installation (94.9%), and a wood deck addition (75.6%). Siding replacement and window projects also provided high returns, with the highest recouping interior project being a minor kitchen remodel (80.5%).
3.New for 2019
Two new projects were added to the 2019 Cost vs. Value Report. The first is a roofing replacement job that adds standing-seam metal roofing. Compared with asphalt shingles, metal roofing costs significantly more but brings with it much greater durability. The second project is a revamp of the universal design bathroom, which was first introduced to Cost vs. Value in 2017. While the overall dimensions and features of the current project are comparable, the finishes and mechanicals – including tiled walls and shower, humidity-controlled ventilation and radiant-heat floors – are more consistent with an upscale project than the previous specs allowed.
4.Think like a broker
The reason for high returns on exterior projects, and especially façade facelifts, stems from the valuations set by the real estate community. "Curb appeal" and "first impressions" are central to a real estate professional's estimation of resale value. Granted, a home's exterior will only persuade potential buyers to see more, and first impressions can vary from one individual to the next. But the impact these impressions make is critical in setting the stage for what a buyer is willing to pay for a home.
© 2019 Florida Realtors®
Fla.’s housing market: Median prices, inventory up in Dec.
/ORLANDO, Fla. – Jan. 22, 2019 – Florida's housing market reported higher median prices and increased inventory (active listings) in December compared to a year ago, according to the latest housing data released by Florida Realtors®. However, buyer uncertainty from rising mortgage rates and the federal government's shutdown may have impacted home sales, which were lower than the level of sales a year ago. Sales of single-family homes statewide totaled 20,633 last month, down 9.9 percent compared to December 2017.
"Florida's housing sector is continuing to show signs that inventory levels are finally easing in many local markets after being constrained for a long time," says 2019 Florida Realtors President Eric Sain, =""> statewide median price for condo-townhouse units was $185,000, up 2.8 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in November 2018 was $260,500, up 5 percent from the previous year; the national median existing condo price was $554,760; in Massachusetts, it was $395,000; in Colorado, it was $375,000; and in New York, it was $275,000.
Looking at Florida's condo-townhouse market in December, statewide closed sales totaled 8,156, down 11.4 percent compared to a year ago. Closed sales data continued to show fewer short sales and foreclosures in November: Short sales for condo-townhouse properties declined 39.7 percent and foreclosures fell 33.7 percent year-to-year; while short sales for single-family homes dropped 49.8 percent and foreclosures fell 26.8 percent year-to-year. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
"Notably, this year-over-year decline in sales for December was felt across the nation, not just in Florida, which is evidence that interest rates played at least some role in dampening the number of closings," says Florida Realtors Chief Economist Dr. Brad O'Connor. "Thirty-year fixed mortgage rates began to ramp up in September and had reached a multi-year high of close to 5 percent by mid-October, which is typically when financed sales closing in December go under contract."
Interest rates likely will continue to play a role in determining the direction of Florida's housing markets going forward, O'Conner adds. "Homebuyers considering sitting on the fence until prices come down might want to take note that we're also likely to see significantly higher mortgage rates by that point. While there has been a slight softening in the pace of home price growth since mid-2018, there are currently no signs that Florida home values will experience any wholesale declines over the next year."
Potential homebuyers should also note that Florida's active listings – or inventory levels of for-sale homes – have been trending up across the state, according to O'Connor.
"Statewide, active listings of existing single-family homes have been on the rise since July, which has helped contribute to the softening of price growth, and they continued to climb in December," he says. "At year's end, inventory was up over 13 percent compared to the end of 2017. Importantly, inventory levels are now rising across most of the pricing spectrum, including in some of the more affordable ranges."
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.64 percent in December 2018, up from the 3.95 percent averaged during the same month a year earlier.
To see the full statewide housing activity reports, go to Florida Realtors Research & Statistics section on floridarealtors.org. Realtors also have access to local market stats (password protected) on Florida Realtors' website.
© 2019 Florida Realtors®
NAR: U.S. home sales down 6.4% in Dec.
/WASHINGTON – Jan. 22, 2019 – After two consecutive months of increases, existing-home sales declined in the month of December, according to the National Association of Realtors®(NAR). None of the four major U.S. regions saw a gain in sales activity last month.
Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 6.4 percent from November to a seasonally adjusted rate of 4.99 million in December. Sales are now down 10.3 percent from a year ago (5.56 million in December 2017).
Lawrence Yun, NAR's chief economist, says current housing numbers are partly a result of higher interest rates.
"The housing market is obviously very sensitive to mortgage rates," Yun says. "Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today. Now, with mortgage rates lower, some revival in home sales is expected going into spring."
The median existing-home price for all housing types in December was $253,600, up 2.9 percent from December 2017 ($246,500). December's price increase marks the 82nd straight month of year-over-year gains.
Total housing inventory at the end of December decreased to 1.55 million, down from 1.74 million existing homes available for sale in November, but that's a year-to-year inventor increase from 1.46 million.
Unsold inventory is at a 3.7-month supply at the current sales pace, down from 3.9 last month and up from 3.2 months a year ago.
Homes also stayed on the market a bit longer before securing a contract. They typically stayed on the market for 46 days in December, up from 42 days in November and 40 days a year ago. However, 39 percent of homes sold in December were on the market for less than a month.
"Several consecutive months of rising inventory is a positive development for consumers and could lead to slower home price appreciation," says Yun. "But there is still a lack of adequate inventory on the lower-priced points and too many in upper-priced points."
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.64 percent in December from 4.87 percent in November. The average commitment rate for all of 2017 was 3.99 percent.
"The partial shutdown of the federal government has not had a significant effect on December closings, but the uncertainty of a shutdown has the potential to harm the market," says NAR President John Smaby. "Once the government is fully reopened, I am hopeful that housing transactions will increase."
First-time buyers were responsible for 32 percent of sales in December, down from November (33 percent), but the same year-to-year.
All-cash sales accounted for 22 percent of transactions in December, up from November and a year ago (21 and 20 percent, respectively). Individual investors, who account for many cash sales, purchased 13 percent of homes in December, which is unchanged from November but down year-to-year (16 percent).
Distressed sales – foreclosures and short sales – represented 2 percent of sales in December, unchanged from 2 percent last month and down from 5 percent a year ago.
Single-family and condo/co-op sales
Single-family home sales were at a seasonally adjusted annual rate of 4.45 million in December, down from 4.71 million in November, and 10.1 percent below the 4.95 million sales pace one year earlier. The median existing single-family home price was $255,200 in December, up 2.9 percent from December 2017.
Existing condominium and co-op sales were at a seasonally adjusted annual rate of 540,000 units in December, down 12.9 percent from last month and down 11.5 percent from a year ago. The median existing condo price was $240,600 in December, which is up 2.3 percent from a year ago.
Regional breakdownDecember existing-home sales in the Northeast decreased 6.8 percent to an annual rate of 690,000 and also 6.8 percent below a year ago. The median price in the Northeast was $283,400, which is up 8.2 percent from December 2017.
In the Midwest, existing-home sales fell 11.2 percent from last month to an annual rate of 1.19 million in December, down 10.5 percent overall from a year ago. The median price in the Midwest was $191,300, unchanged from last year.
Existing-home sales in the South dropped 5.4 percent to an annual rate of 2.09 million in December, down 8.7 percent from last year. The median price in the South was $224,300, up 2.5 percent from a year ago.
Existing-home sales in the West dipped 1.9 percent to an annual rate of 1.02 million in December, and 15 percent below a year ago. The median price in the West was $374,400, up 0.2 percent from December 2017.
© 2019 Florida Realtors®
FAU study: Market overheated but buyer demand still high
/BOCA RATON, Fla. – Jan. 18, 2019 – National housing prices as a whole are slightly overheated and residential real estate markets are experiencing minimal downward pressure on the demand for homeownership, according to a new study from faculty at the Florida Atlantic University College of Business.
The study's author, Ken Johnson, Ph.D., a real estate economist with FAU's College of Business, said the U.S. is nearing the peak of the current housing cycle, evidenced by the fact that property prices around the country are increasing but at a decreasing rate, meaning property appreciation is slowing.
The study, "Where Are We Now with Housing: A Report," investigates and compares the current status of U.S. housing at a national level with that of housing at the peak of the last cycle in July 2006.
"All evidence is suggesting that the national housing market is peaking," Johnson says. "However, this time around, from a national perspective, things should turn out quite differently."
Based on scores from the Beracha, Hardin & Johnson Buy vs. Rent Index, which Johnson co-authors, and data from the S&P CoreLogic Case-Shiller 20 City Composite Home Price NSA Index, the study finds that housing prices are currently 7.3 percent above their long-term pricing trend, but with minimal downward pressure on the demand for homeownership.
For comparison, at the peak of the last housing cycle, prices were 31 percent above their long-term pricing trend. Johnson's BH&J Index was nearing a score of 1 (the highest possible score) in the summer of 2006, indicating extreme downward pressure on the demand for homeownership. Today, that score stands at .039.
"It looks like we're in for more of a very high tide, as opposed to a tsunami, as residential prices peak in this latest cycle," Johnson says. "At a minimum, we can expect flatter housing price growth. At worst, we could experience price declines slightly below the long-term pricing trend."
Johnson's research is based on a national composite of housing prices and estimates of the downward pressure on the demand for homeownership, so the housing picture in some cities will look vastly different from others. For instance, three metropolitan markets – Dallas, Denver and Houston – are all currently significantly above their long-term housing price trends, with very high scores on the BH&J Index.
© 2019 Florida Realtors®
Thinking of Buying or Selling a Waterfront Home?
Some Florida Cities Top U.S, Charts - Fort Myers No. 1
/Some Fla. cities top U.S. growth charts – Fort Myers No. 1
ORLANDO, Fla. – Oct. 3, 2018 – In a WalletHub study of growth in U.S. cities, Fort Myers ranked at the top both overall and in the small-city category – but the state overall showed strong growth. In the ranking of large metro areas, Miami ranked second after Austin, Texas. In the ranking of midsize cities, Lehigh Acres ranked sixth.
To determine growth over a seven-year period, WalletHub used 15 metrics to compare 515 U.S. cities. The study included only the area within city limits, and they ranged from a score of 76.57 (Fort Myers) down to 17.27 (Shreveport, La.) The lowest Florida score was Lauderhill's 36.27.
Florida's large cities by rank out of a total of 66, ranking 65.83 to 28.27
2. Miami: 65.75
19. Tampa: 53.42
26. Jacksonville: 50.61
Florida's medium cities by rank out of a total of 233, ranking 73.55 to 29.80
5. Lehigh Acres: 71.00
12. Cape Coral: 64.38
21. Orlando: 59.66
30. Davie: 57.63
40. Pompano Beach: 55.82
42. Port St. Lucie: 55.549
45. Coral Springs: 54.87
50. Brandon: 54.59
52. Miramar: 54.17
64. West Palm Beach: 52.44
67. Pembroke Pines: 52.18
71. St. Petersburg: 51.81
73. Palm Bay: 51.73
78. Lakeland: 50.76
80. Clearwater: 50.60
97. Hollywood: 48.64
100. Fort Lauderdale: 48.44
113. Hialeah: 47.55
121. Miami Gardens: 46.63
147. Spring Hill: 44.64
180. Tallahassee: 40.09
185. Gainesville: 39.22
Florida's small cities by rank out of a total of 200, ranking 76.57 to 17.27
1. Fort Myers: 76.57
15. Boynton Beach: 60.51
16. Sunrise: 60.04
18. Town 'n' Country: 58.31
22. Boca Raton: 56.69
26. Palm Coast: 55.50
38. Largo: 52.67
42. Deltona: 51.47
48. Weston: 50.36
53. Plantation: 49.56
59. Deerfield Beach: 48.30
85. Melbourne: 44.72
98. Miami Beach: 43.52
134. Kendall: 38.47
152. Lauderhill: 36.27
© 2018 Florida Realtors®
Realtor.com: Inventory Crisis Appears to be Ending
/Realtor.com: Inventory crisis appears to be ending
SANTA CLARA, Calif. – Oct. 3, 2018 – Realtor.com's September housing report shows national inventory has started to flatten, signaling a crucial inflection point for the inventory crisis. The numbers are based on listings submitted to realtor.com for the month, and it refers to realtor.com listing prices rather than actual selling prices.
According to the realtor.com report, inventory declined a small 0.2 percent from a year ago, but it's poised for positive growth ahead thanks to an 8 percent increase in new listings – the largest yearly jump since 2013.
"After years of record-breaking inventory declines, September's almost flat inventory signals a big change in the real estate market," says Danielle Hale, chief economist for realtor.com. "Would-be buyers who had been waiting for a bigger selection of homes for sale may finally see more listings materialize.
"But don't expect the level to jump dramatically," Hale warns. "Plenty of buyers in the market are scooping up homes as soon as they're listed, which will keep national increases relatively small for the time being."
Florida cities cited in realtor.com's September study
Jacksonville: Current inventory up 14%; new inventory up 54%
Tampa-St. Petersburg-Clearwater: Current inventory up 7%; new inventory up 65%
Miami-Fort Lauderdale-West Palm Beach: Current inventory up 3%; new inventory up 79%
Orlando-Kissimmee-Sanford: Current inventory down 1%; new inventory up 50%
