Real estate statistics continue to confirm an upward trending market in Southwest Florida. Lawrence Yun, NAR chief economist, said underlying factors are much better compared to one year ago. “The market is trending up unevenly, with record high consumer buying power and sustained job gains giving buyers the confidence they need to get into the market.” He added that “although relatively unusual, there will be rising demand for both rental space and homeownership this year.” January and February made up the best winter for home re-sales in five years. Though, now that a foreclosure abuse settlement has been reached with the nation’s five biggest mortgage lenders, foreclosure activity surged across half of U.S. states.
According to Jennifer Zales, Luxury Market Specialist with Coldwell Banker in Tampa, “I’m working with many more international buyers lately looking at and purchasing luxury waterfront real estate. With direct flights into Tampa International Airport, Tampa Bay is an even more popular choice. Area luxury real estate that lingered on the market for 2 years or more is selling rapidly.”
Inman News recently reported their “Top 10 Global Hotspots for International Buyers” which includes the Florida areas of: North Port-Sarasota-Bradenton; Lakeland-Winter Haven; Cape Coral-Fort Myers; Orlando –Kissimmee; Miami-Fort Lauderdale and Tampa-St. Petersburg-Clearwater. Their report was based upon data from DataQuick, a San Diego-based real estate research firm.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was a record low 3.89 percent in February, down from 3.92 percent in January. While March figures show that a 30-year loan jumped to 4.08 percent. According to leading economists buyers may begin to move more quickly in order to take advantage of lower rates.
Phil Wood, president of John R. Wood Realtors® of Naples, FL, speaks of multiple offer situations in his Southwest Florida territory. “The buyers that we’re seeing are for the most part second-home buyers who have been waiting. They’ve wanted to be down here for four or five years, but all their plans got delayed because of the recession.”
The total number of existing home sales fell a bit in February, according to new figures from local REALTOR® associations, but the number of homes under contract rose to a nearly 12-month high. Pending home sales are the best indicator of trending home-sales activity.
The new numbers are a good sign for the Gulf Coast economy, where for decades the state of the real estate market has often determined the economic health of the region. It is a marked change from even the end of last year. In January buyers seemed to come to life and in February, agents say, the activity at times seemed frenetic. Sales of newly constructed U.S. homes fell in February for the second straight month. Builders of new homes have an increased confidence as a growing number express interest in buying new construction. In February, new construction permits for both single-family homes and apartments were up tremendously.
John R. Wood Realtors® recently released its February 2012 real estate market statistics, covering the Naples, Bonita Springs and Estero, Florida markets, which showed that properties priced between $500,000 and $750,000 posted the biggest gains over 2011 with a 30% increase. The number of pending sales between $500,000 and $1,000,000 were also up by 31% over the first two months of 2011.
Statewide and nationally, there was a similar pattern to the one being seen in Southwest Florida, though less pronounced. In Florida, sales declined 4.8 percent during February but the number of pending sales rose 36 percent for homes and nearly 20 percent for condominiums and townhomes. The statewide median was $134,000, up 7.2 percent from a year ago. For condos, the price was $95,000, up nearly 16 percent from February 2011.
A study from the Joint Center for Housing Studies at Harvard University states that the growing number of those over 65 will shift the composition of housing demand toward smaller homes, rental properties and senior housing.
Baby boomers are becoming seniors at a rate of 10,000 per day, 4 million per year. By 2020, 80 million people in the U.S. will be 65 or older. Many will uproot to flee ice storms and frost heaves, move closer to kids and grandchildren, or seek gated retirement communities for security and social activities.
Demand for the higher priced properties has definitely picked up in the 2012 season. Local REALTORS® can rattle off recent successes, in some cases closing deals to international buyers that had gathered dust for years.
The inventory of luxury properties priced above $1 million is trending at one of its lowest levels since the onset of the property boom in 2004. The number of luxury properties for sale is presently 16% lower than it was in the quarter ending February 2004.
The NAR’s Profile of International Buying Activity showed that during the 12-month period ending March 2011, Canadians accounted for 23 percent of all foreign buyers, with Florida capturing 31 percent of those buyers. Canadians specifically referred to “a perceived positive return on their investment,” according to NAR. The strength of the Canadian dollar, lower pricing in the U.S. housing market and perceptions in the Great North that America’s economy is rebounding are all driving the spur in buying.
The National Association of Realtors® attribute the momentum in international buying to wealthy vacationers and especially Canadian buyers. There is a renewed sense of urgency not seen in many years. The Canadian buyers also are being driven by a currency that is now equal in value to the dollar. “Though the winter up north was warmer than usual, it is unbelievable how busy it is here.”
Sources: National Association of Realtors®, Inman News, Joint Center for Housing Studies -Harvard University