We all have heard that real estate is all about location, location, location. That philosophy is certainly true in SW Florida. Take Quail West as a prime example. In the past 15 months, there have been 140 new homes built in Quail West. That, you will see, is a stunning number of homes as compared to the rest of the market.
Nationwide, after a roller-coaster decade of boom-bust-boom, the US housing market is going down-hill just when many economists thought annual sales would be heading up. Bloomberg News reports that sales of previously owned properties in March tumbled 7.5% from a year earlier to the slowest pace in 20 months, while purchases of new houses sank 14.5% from February. Mortgage applications to buy homes plunged 19% from a year earlier, indicating slowing demand during what is typically the busiest season for deals.
The housing market’s underlying fragility is emerging as outside influences that fueled a 2 year rebound are receding. Mortgage interest rates are rising from record lows and investors, who had helped drive national prices up more than 20%, are now retreating.
Even though the real estate news state-wide in Florida and locally is better than the national, we must be mindful that most of the SW Florida buyers come from some other region in the US. If those prospective buyers are facing difficulties selling their homes up north, then it only stands to reason that this could have a negative impact here locally.
The Bonita Springs/Estero Association of Realtors reports closed sales for single family homes in that area decreased in March by 37.8% compared with last year. Although this number might sound very discouraging, The Brown Realty Group would attribute most of this decline to a lack of available housing inventory for sale. Sales declined probably because active listings decreased during this same period by 41.3%. Similar decline was seen for condos and townhouses. The good news is that the average sale price for single family homes in the Bonita/Estero area have seen an increase of 8.2% more than the price in March 2013. Condo sale prices are up 5.7%, also over March 2013.
At the NABOR (Naples Area Board of Realtors) Economic Summit, the reports were generally positive for our area. The National Association of Realtors’ Chief Economist, Dr. Lawrence Yun reported that, “8000 people a day are currently turning 65 years old.” He said that, “The days of 3.5% mortgages are gone and that we are in a rising interest rate environment.”
The Florida Association of Realtors Economist, Dr. John Tuccillo stated, “A six month inventory of available homes for sale was a balanced market for properties priced at $500,000 or less.” He reminded us that in 2008, there was a 25 month inventory and that the current inventory state-wide is 5.2 months. Finally, FGCU Professor, Dr. Ronald Coccari gave some interesting population projections for Lee and Collier counties. Without getting too deep in the weeds, Professor Coccari is generally projecting 10% increases in population for both counties every 5 years.
Florida continues to rank high in the percentage of seriously underwater homeowners with a mortgage. 31% of all Floridians, with a mortgage, are underwater. (FMV of their home is less than their mortgage balance.) Florida ranks second nationwide to Nevada at 34%, followed by Illinois at 30%, Michigan at 29% and Ohio at 27%.
The Brown Realty Group continues to thrive in its affiliation with Downing-Frye Realty Inc. In the first quarter of 2014, Downing-Frye was ranked the #1 for broker market share. Through March 31, 2014, Downing-Frye Realty had total sales volume of over $326,000,000! The Brown Realty Group is honored to rank in the top 10% of Downing-Frye Realty.