Cash Buyers – Sarasota-Manatee No. 2

July 20, 2015 by

Cash Buyers SarasotaCash Buyers

Cash on the table remains the preferred method of payment for home buyers in Southwest Florida.

The Sarasota-Manatee region ranked second among the 100 largest U.S. metro areas for cash buyers in April, according to a recent report by data provider CoreLogic.  The two-county region ranks second among major U.S. metropolitan areas for the highest share of cash buyers of single-family homes and condominiums.

Cash buyers have dominated the Sarasota-Manatee real estate market for several years, even leading the nation for the top share in April. But no-loan buying has actually slowed down, as 58.1 percent of home sales were closed with cash in May 2014.

Nationwide, all-cash buying dropped to 24.6 percent in May, its lowest level since November 2009, RealtyTrac reported.

  • Florida led the nation with a cash sales share of 51.4 percent, CoreLogic said
  • Alabama was second at 48.5 percent, followed by West Virginia at 48.3 percent and New York at 45.4 percent.
  • The West Palm Beach-Boca Raton-Delray Beach region posted the nation’s highest share of cash sales at 59.1 percent. Cape Coral-Fort Myers was third at 58.1 percent, and Fort Lauderdale-Pompano Beach-Deerfield Beach was fifth at 56.9 percent.
  • Syracuse, New York, reported the lowest share of cash sales at 11.0 percent.

Locally, Realtors say smaller investors have become key players in home sales while large institutional investors — who commanded the market during its early rebound — have stepped back. Retiring baby boomers who have sold homes up North also are paying cash for homes here.

“As housing transitions from an investor-driven, cash-is-king market to one more dependent on traditional buyers, sales volume has been increasing over the last few months and is on track in 2015 to hit the highest level we’ve seen since 2006,” said RealtyTrac vice president Daren Blomquist.

Institutional investors — those that buy at least 10 properties a year — accounted for just 1.7 percent of home and condo sales in Sarasota-Manatee in May, down from 4.8 percent one year earlier.

The share of distressed sales — homes in some stage of foreclosure — also has declined from 24.8 percent to 15.5 percent of all sales over the year.

Realtors say the region is in a sellers’ market, with high demand and a dwindling supply of existing homes for sale.

In Sarasota and Manatee, the median sales price for homes and condos was $155,000 in May, down 1 percent for the year.

But as usual, distressed sales pull down those numbers. Non-distressed homes sold for a median $180,000, or 9 percent ahead of last year, while distressed properties changed hands for $105,000, a 9 percent drop.

“Distressed sales in May represented a significantly smaller share of a growing home sales pie as an increasing number of non-distressed sellers continued to cash out on the equity they’ve gained over the last three years of rising home prices,” Blomquist said.

“But those distressed sales are still acting as a drag on home prices, selling at a median price that is 43 percent below the median price of a non-distressed sale — the biggest gap we’ve seen since we began tracking that distressed discount in January 2006,” he added.

Herald Tribune July 2015

Filed Under: Downtown Sarasota Condos, Downtown Sarasota Real Estate, Sarasota Real Estate Market News Tagged With: , ,

Home Buying Season in Full Swing – Downtown Sarasota

March 26, 2015 by

Southwest Florida’s home buying season is in full swing — Home-buyers-1and it’s shaping up to be one of the busiest ever.

Despite rapidly rising home prices and lingering inventory woes, homes from Parrish to Punta Gorda continue to change hands at the fastest clip on record, and most industry watchers don’t foresee it slowing any time soon.

The surging activity in February comes during the busiest time of the year for real estate in Florida, with snowbirds and vacationers in town, some scouting for homes.

Coupled with pent-up demand from the Great Recession, and restored stock wealth for many retirement buyers, the market is poised for another robust spring, area Realtors say.

“People are able to sell their homes up north and plan retirement,” said Gloria Weed, branch manager of Michael Saunders & Co.’s office in Lakewood Ranch. “I have lived here for 30 years, and I have just never seen so many people here during season. Just look at the traffic.”

“The more people who’re here, the more who like, the more who decide they want to live here and buy homes here,” Weed said.

  • Agents sold 1,875 existing homes and condominiums during February in Sarasota, Manatee and Charlotte counties, according to figures released Monday from the industry trade group Florida Realtors.

That was up 12.8 percent from a steady January and 8.8 percent ahead of the same time in 2014, which finished as the best year for real estate activity in history.

Because housing contracts typically take 30 to 60 days to close, these figures represent deals that were likely first inked in December or early January, the start of the region’s season.

Those existing sales also do not count new homes, which also are selling at post-recession bests.

“It’s the continued growth and exposure in other areas,” said Peter Crowley, broker and co-owner of Re/Max Alliance Group. “You couple that with miserable winters up North, and I just believe we’re the beneficiary. The buyer demand continues to be very strong.”

Rising prices

That swelling demand has pushed the median price for a single-family home in the North Port-Bradenton-Sarasota area up 12.5 percent over the year to $225,000 in February. The median is the midpoint: half the homes sold for more, half for less.

Of the Florida metropolitan areas where home data is tracked, only Port St. Lucie, Jacksonville and Lakeland saw their single-family housing prices climb faster.

Condominium prices in this region similarly rose by 6.8 percent of the year to a $175,000 February median.

The recent price gains have sparked fears of housing affordability for working- class families, with average rents similarly growing at historic levels, while worker wages generally have remained stagnant.

The Federal Reserve also is expected to ease its bond buying strategy this year and raise interest rates, which could begin to impact the cost of mortgages, which have remained a key selling point.

The average fixed interest rate for a 30-year, conventional mortgage in February rose slightly to 3.71 percent, but still remains historically low, according to Freddie Mac.

Some analysts remain skeptical on the industry’s future. They point to lingering foreclosures, investor impacts, tight financing availability and poor wages.

Some also question whether there is enough full-time owner occupiers to support the market’s sustained recovery. “There’s a tremendous amount of hype in the marketplace,” said Jack Mc-Cabe, a Florida real estate consultant. “We all know what happened the last time we saw this. I think we’re in a transition stage, and I really believe we will be back to a buyer’s market by the end of the year.”

The bigger picture

The sales trend was similar across the Sunshine State, where Realtors sold 26,961 existing homes in February, up 15.3 percent from January and a 15.2 percent increase from the same time last year.

The statewide price for a single-family home reached a February median of $179,995, up about 9 percent over the year, according to Florida Realtors.

Across the country, home sales improved as inventory shortages pushed price growth to its fastest pace in a year.

  • Existing home sales rose 1.2 percent from January to a seasonally adjusted annual rate of 4.88 million in February, which was also 4.7 percent higher than a year ago — the fifth consecutive month of annual gains, according to data released Monday by the National Association of Realtors.

The median home price last month also jumped nearly 8 percent to $202,600, the largest national increase since February 2013.

Those improvements were driven largely by a stock of existing homes for sales that remains below a year ago at a 4.6-month supply, which measures the time it would take to deplete the inventory at the current sales pace if no new homes were added to the market.

“Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels,” NAR Chief Economist Lawrence Yun said in a statement. “Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise.”

“With all indications pointing to a rate increase from the Federal Reserve this year — perhaps as early as this summer — affordability concerns could heighten as home prices and rents both continue to exceed wages.”

“It’s the continued growth and exposure in other areas. You couple that with miserable winters up North, and I just believe we’re the beneficiary. The buyer demand continues to be very strong.”

– Peter Crowley, broker and co-owner of Re/Max Alliance Group

Herald Tribune 3/24/2015

Filed Under: Downtown Sarasota Condos, Downtown Sarasota Real Estate, Sarasota Real Estate Market News Tagged With: , ,

Sarasota Construction Projects – Sarasota Lifestyles

November 24, 2014 by

Downtown Sarasota Construction Projects – Development News

The Sarasota housing market continues toSarasota Bay View show signs of strength: In November, at least three housing projects totaling more than 400 units have emerged in neighborhoods near the heart of the Downtown Sarasota. Currently in various stages of development, the projects have the potential to leave a significant mark on the city’s landscape.

ROSEMARY DISTRICT
1401 Fruitville Road
With the Rosemary Residential Overlay District in place, a second developer is seeking to take advantage of the density bonuses created by the new regulations.

Framework Group LLC, a Tampa-based developer, is proposing a five-story, 228-unit apartment complex along Fruitville Road between Central Avenue and Lemon Avenue. With the project, called Sarasota Flats, the group said it hopes to appeal to a broadening market interested in highly amenitized luxury apartments.

The 3.05-acre site is located within the Rosemary Residential Overlay District, which allows for housing projects with a density of 75 units per acre — three times the previous cap. Philip Smith, president of Framework Group, said the incentive to develop in the area was a significant draw.

DOWNTOWN
711 S. Palm Ave.
On Wednesday, the developer behind a planned five-story development on south Palm Avenue appeared before the city’s Development Review Committee.

The condominium complex would replace a single-family residential home at 711 S. Palm Ave., subject to demolition approval.

With 15 units across four residential stories, the development was geared more toward full-time residents., with a goal to attract the end user who will spend significant time here and live here rather than just spending a couple of weeks in Sarasota.

Although the project is in its early stages, concern is already brewing among adjacent property owners about how their sightlines might be affected if the building is not set further back from the sidewalk.

Seaward Development is currently working on plans to bring forward to the city as soon as next month, with a targeted construction date as early as next spring.

DOWNTOWN
1455 Second St.
A site plan has been in place for 1455 Second St. for six years, but the fate of the project has regularly been in question.

On Monday, the City Commission may have helped keep the project afloat, allowing the developer to forgo required payments to an Affordable Housing and Transit Development Fund.

The site plan, approved under the now-expired Downtown Residential Overlay District, calls for a 10-story building with 168 residential units and 16,400 square feet of retail space on the 0.84-acre parcel. Earlier this year, property owner Jesse Biter said he was uncertain whether he could move forward with his plans without another partner coming aboard.

Since then, Carter Acquisitions LLC has agreed to partner with Biter Enterprises in developing the project. Before an agreement is finalized, however, the group sought to avoid the payments to the housing and transit funds as was stipulated following site-plan approval.

Since that approval, the plans have been modified so more than 130 of the apartments are 1,250 square feet or smaller. Bill Merrill, who represented Carter Acquisitions at Monday’s meeting, said the intent of the DROD regulations was to create smaller, more attainable housing units; the required payments to housing and transit were triggered by the number of units larger than 1,250 square feet.

Before the 3-2 vote to forgo the payment, Vice Mayor Susan Chapman questioned whether the smaller apartments qualified as attainable. Jerome Hagley, executive vice president with Carter Acquisitions, said one-bedroom units should range from $1,100 to $1,500, while two-bedroom apartments will be priced from $1,800 to $2,200.

Filed Under: Downtown Sarasota Condos, Downtown Sarasota Construction, Downtown Sarasota Real Estate, Sarasota Lifestyle, Sarasota Real Estate Market News Tagged With: , , , ,

Sarasota Named Among Top Small Towns for Luxury Home Buyers

July 24, 2014 by

beau-ciel viewWhat do the Principality of Monaco and the city of Sarasota have in common? According to Christie’s International Real Estate, they are two of 10 of the most popular small communities for wealthy home buyers.

In Luxury Defined, Christie’s report on the luxury residential property market in 2013, Sarasota is listed as a “Jewel Box Market,” which is characterized as a community with a population of less than 150,000 that has a large percentage of wealthy residents and “quality lifestyle offerings.” The report cites the 8% of the local properties worth $1 million or more and a positive trend in the luxury market last year as reasons for Sarasota’s inclusion.

“Jewel Box” markets as defined by Christie’s International Real Estate include:

  •  Bedford, N.Y.
  •  Jackson Hole, Wyo.
  •  La Jolla, Calif.
  •  Martha’s Vinyard, Mass.
  •  Sylt, Germany
  •  The Principality of Monaco
  •  Montecito, Calif.
  •  Punta del Este, Uruguay
  •  Lugano, Switzerland
  •  Sarasota
Filed Under: Sarasota Lifestyle Tagged With: , ,

Cash is King in Southwest Florida Real Estate – Sarasota Market Update

May 22, 2014 by

Cash_buyers_sarasotaCash buyers continue to make up the bulk of Southwest Florida’s residential real estate transactions.

Sales of single-family homes and condominiums using cash accounted for 67 percent of all transactions in Sarasota County in January, according to a new report from data provider RealtyTrac. That was up from 62 percent in December, and from 45 percent one year earlier.

Home and condo sales closed with cash totaled nearly 60 percent of all sales in Manatee County in January, down from 64 percent from the previous month but up from 35 percent over the year.

Buyers, meanwhile, paid cash for 88 percent of the residences sold in Charlotte County, up from 83 percent in December and more than triple the 24 percent rate one year earlier.

As well, Florida remained the cash-buying capital of the nation at 65.5 percent of all home sales, RealtyTrac noted. The U.S. average was 44 percent.

The influence of institutional investors — such as giant equity fund Blackstone Group of New York — appears to be waning across the region.

Institutional buyers — defined as entities purchasing at least 10 properties a year — accounted for just 1.2 percent of residential sales in Sarasota in January. That compares with nearly 4 percent in December and 6 percent one year earlier.

In Manatee, institutions bought 7.5 percent of all homes, down from 15.5 percent the prior month and by 11 percent for the year.

In Charlotte, they accounted for 19 percent of residential sales, lower than the 30 percent the month before but higher than the 15 percent over the year.

Seven percent of sales statewide were purchased by institutions. The U.S. rate was 5.2 percent, a decline from 8.2 percent for the year and the lowest level since March 2012.

“Many have anticipated that the large institutional investors backed by private equity would start winding down their purchases of homes to rent, and the January sales numbers provide early evidence this is happening,” said Daren Blomquist, vice president at RealtyTrac.

“It’s unlikely that this pullback in purchasing is weather-related, given that there were increases in the institutional investor share of purchases in colder-weather markets such as Denver and Cincinnati, even while many warmer-weather markets in Florida and Arizona saw substantial decreases in the share of institutional investors from a year ago,” he added.

Florida had three metro areas with the largest drops in institutional investor shares of purchases: Fort Myers-Cape Coral, 70 percent; Tampa, 48 percent; and Jacksonville, 21 percent.

RealtyTrac said it looks as if big investors have moved to other parts of the country, with major increases in Austin, Texas, Cincinnati, Denver and Raleigh, N.C.

Meanwhile, lenders seem to be relying less on short sales to get rid of their distressed properties. Short sales are transactions in which lenders agree to allow a home to sell for less than the value of the mortgage.

Those sales totaled 14 percent of all residential deals in Sarasota in January, down from 20 percent a year earlier.

Manatee reported a 14 percent rate of short sales, compared with 16 percent a year before. And short sales comprised 8 percent of transactions in Charlotte, compared with 14 percent a year ago.

Owners also may be shying away from short sales because a popular tax break on forgiven mortgage debt expired at the end of 2013. That deduction saved short sellers thousands of dollars in taxes.

Florida led the nation, though, with a 15 percent level of short sales. The U.S. rate was just 6 percent.

The median sales price of all residential properties — including regular and distressed sales — climbed region wide over the year.

Sarasota posted a 22 percent gain to $154,000, Manatee reported a 7 percent gain to $155,000, and Charlotte rose 6 percent to $115,500.

Florida’s median price was $135,000, up 15 percent for the year.

Sarasota Herald Tribune, May 2014

Filed Under: Downtown Sarasota Real Estate, Sarasota Lifestyle, Sarasota Real Estate Market News Tagged With: , ,

Top 10 Countries Racing to Buy American Homes

April 24, 2014 by

international buyers10 countries racing to buy American homes

International homebuyers are attracted to the United States for a number of reasons. These include favorable housing prices, good weather, the country’s relative economic stability and an attraction to America in general. As the housing market improved and home prices rebounded, the interest of foreign buyers in U.S. properties has soared.

Interest in U.S. property increased dramatically in a number of countries between 2009 and 2013. In all, interest in home buying, according to housing market firm RealtyTrac, increased by 95% or more in 10 countries, and at least doubled in nine of these nations. Interest in U.S. property by residents of the United Arab Emirates rose 352%, the most out of any country. Based on subscription data provided by RealtyTrac, these are the 10 countries where interest in buying American homes is on the rise.

Overseas buyers likely see value in the U.S. housing market. In an interview with 24/7 Wall St., Daren Blomquist, vice president of RealtyTrac, said, “The U.S. real estate market is coming off of a rough patch and entering recovery mode. And so international buyers see it as a great time to jump in and catch the U.S. market on the upswing.” According to the Case-Shiller 20-City Composite Home Price Index, the U.S. housing market is just beginning to rebound from its lows set in March 2012.

While tepid growth may dissuade some potential homebuyers, these countries have many exceptionally wealthy residents. Three of these countries — Germany, the United Kingdom and China — each had more than 10,000 ultra high net worth residents last year and were in the top five countries globally in that measure. China’s total number of ultra high net worth residents is even greater if the 3,180 ultra wealthy residents of Hong Kong are included.

Another key factor that drives many prospective homebuyers to consider the United States is common language. English-speaking countries accounted for 68% of international residents looking for homes in the U.S. Much of this interest came from U.S. neighbor Canada, which alone accounted for 45% of all international interest. The United Kingdom and Australia also each accounted for more than 10% of all interest, ranking second and third among all countries, respectively.

However, language does not explain the increased interest from countries such as the UAE and China, Blomquist noted. Additionally, much of the growth in foreign interest has come from European nations, including Switzerland and France. Six of the countries with the largest percentage increases in property seekers are located in Europe.

Another likely important factor in driving international interest in U.S. homeownership may be America’s reputation as a relative safe haven for investors. For many buyers, Blomquist noted, the U.S. represents “the most stable country out there.”

Concerns about the financial systems in Italy and China may contribute to demand for U.S. homes from those countries as well. Worries in China, Sweden, Canada, Switzerland and the U.K. about the local housing market may also be driving U.S. investment.

To determine the 10 countries where the interest in buying American homes is on the rise, 24/7 Wall St. reviewed subscriber data from RealtyTrac. We also reviewed figures on real (inflation-adjusted) GDP growth, population and other macroeconomic factors from the International Monetary Fund’s (IMF) World Economic Outlook. Figures on the number of ultra high net worth individuals, defined as people worth $25 million or more, are from Wealth-X.

These are the countries racing to buy American homes.

10. Germany

> Growth in prospective homebuyers: 95.2%
> Share of int’l prospective buyers: 2.6% (7th highest)
> GDP per capita: $39,468 (18th highest)
> Ultra high net worth population: 17,820 (2nd highest)

Germans accounted for 2.6% of all of RealtyTrac’s international homebuyers looking for U.S. property between 2009 and 2013. During that time, home searches rose by more than 95%. Contributing to Germans’ ability to afford international property was the country’s high number of ultra high net worth individuals last year of 17,820, second only to the United States. Despite the weakness of the eurozone economy and Germany’s own slowing growth, no major eurozone country grew faster in 2013. However, interest in U.S. properties has tapered off recently, despite the euro’s gains against the dollar. Between 2012 and 2013, the number of German prospective homebuyers to RealtyTrac rose by just 3.4%, less than most foreign nations during that time.

9. Sweden

> Growth in prospective homebuyers: 100.0%
> Share of int’l prospective buyers: 2.0% (9th highest)
> GDP per capita: $40,870 (14th highest)
> Ultra high net worth population: 1,070 (25th highest)

The number of Swedes interested in buying U.S. real estate doubled between 2009 and 2013. Much of this growth happened last year, when the number of Swedish home searches to RealtyTrac rose by 43%. Like many countries with many residents looking for homes in America, U.S. property may be considered an especially good investment, especially as their country’s economy has been stagnant. Sweden’s gross domestic product has grown less than 1% in each of the past two years. Additionally, many Swedes might find U.S. home prices more affordable. U.S. home prices remain below last decade’s highs, while many market followers believe Swedish home prices are precariously high.

8. Canada

> Growth in prospective homebuyers: 107.7%
> Share of int’l prospective buyers: 45.0% (the highest)
> GDP per capita: $43,146 (9th highest)
> Ultra high net worth population: 4,980 (8th highest)

Canadians make up the largest share of international U.S. home-buying interest, accounting for 45% of total international RealtyTrac subscriptions between 2009 and 2013. The U.S. geographical proximity to Canada and the cultural similarities between the two nations may explain the interest of Canadian investors. The strength of the Canadian economy may have also given residents more opportunities to invest. Last year, the average Canadian household’s net worth, the total value of all assets minus all debt, exceeded that of the average U.S. household. Residents may also find U.S. properties attractive because some consider Canada’s housing market to be overvalued by some.

7. Australia

> Growth in prospective homebuyers: 121.9%
> Share of int’l prospective buyers: 11.0% (3rd highest)
> GDP per capita: $43,042 (10th highest)
> Ultra high net worth population: 3,405 (11th highest)

Australians accounted for 11% of all of RealtyTrac’s international subscribers, third most after the United Kingdom and Canada. The country’s strong economic growth — at least when compared to other major developed economies — likely contributed to the increased interest in buying U.S. property. Australia’s economy grew by 3.7% in 2012 and an estimated 2.5% last year, according to the most recent IMF figures. By contrast, countries in the developed world grew by just 1.4% in 2012 and 1.3% in 2013. Despite recent declines, the Australian dollar has also gained considerably against the U.S. dollar in the past few years, also potentially contributing to the increased interest.

6. United Kingdom

> Growth in prospective homebuyers: 153.8%
> Share of int’l prospective buyers: 12.1% (2nd highest)
> GDP per capita: $37,299 (21st highest)
> Ultra high net worth population: 10,910 (4th highest)

U.K. interest in owning American property has jumped in recent years, including a 34.6% increase in the number of residents looking for property on RealtyTrac alone. Economic reasons could influence prospective homebuyers — residents may see U.S. homes as a safe or profitable investment. The U.K. government’s Help to Buy program, which provides financial help to prospective homeowners in the U.K., has drawn controversy. Detractors of the program have expressed concerns that home prices in the U.K. could rise to unsustainable levels. According to a June 2013 study by the National Association of Realtors, U.K. residents primarily buy single-family homes in suburbs and resort towns in the United States.

5. Italy

> Growth in prospective homebuyers: 178.4%
> Share of int’l prospective buyers: 1.9% (10th highest)
> GDP per capita: $29,598 (34th highest)
> Ultra high net worth population: 2,075 (14th highest)

Italian interest in U.S. homes rose considerably in recent years. Residents looking for homes in the U.S. rose by 178% between 2009 and 2013, despite Italian GDP falling by 2.4% in 2012 and 1.8% last year. In fact, the faltering economy may encourage many Italians to consider U.S. property as a relatively good investment. Italy is also home to a number of extremely wealthy citizens with the resources to invest globally. As of last year, there were more than 2,000 ultra high net worth individuals in Italy — 14th most globally — despite the fact Italy’s population totals an estimated 61 million, 24th most in the world.

4. France

> Growth in prospective homebuyers: 190.0%
> Share of int’l prospective buyers: 2.8% (6th highest)
> GDP per capita: $35,680 (24th highest)
> Ultra high net worth population: 4,490 (9th highest)

Interest in the United States from French residents has soared recently. Searches for homes on RealtyTrac from France nearly tripled from 2009 to 2013, and rose by nearly 60% last year alone. One reason for this may be that France had nearly 4,500 ultra high net worth residents as of last year, more than in all but eight other countries globally. However, France’s economy has also flatlined in recent years, which can often prevent foreigners from buying U.S. property. Simultaneously, many observers and residents have criticized President Francois Hollande’s socialist policy decisions and the resulting high taxes. A number of reports indicate that residents may be leaving the country due to high taxes and tough regulations.

3. Hong Kong and China

> Growth in prospective homebuyers: 254.2%
> Share of int’l prospective buyers: 4.1% (4th highest)
> GDP per capita: $52,687 (7th highest)
> Ultra high net worth population: 13,855 (4th highest)

China’s residents are a major source of international interest in U.S. real estate. China and Hong Kong, collectively, accounted for 4.1% of all international searches on RealtyTrac, more than any other non-English speaking country. One factor that may contribute to this demand is the high number of ultra wealthy residents in mainland China and Hong Kong, where a total of 13,855 such individuals live — more than in all developed nations but the United States, Germany and Japan. In recent years, many wealthy Chinese citizens have considered, or expressed interest in, moving to the United States. Additionally, while China’s economy remains one of the fastest growing in the world, concerns about slowing economic growth and rampant shadow banking activity in the country are considerable. A relatively wealthy population, and concerns about wealth protection, may encourage Chinese residents to consider U.S. property.

2. Switzerland

> Growth in prospective homebuyers: 269.7%
> Share of int’l prospective buyers: 2.1% (8th highest)
> GDP per capita: $45,999 (8th highest)
> Ultra high net worth population: 6,330 (7th highest)

The number of Swiss residents interested in U.S. property has risen dramatically in recent years. Only the United Arab Emirates had a larger increase in the number of prospective homebuyers than the small Alpine nation. Swiss residents accounted for 2% of all international searches despite a population of just roughly 8 million — smaller than New York City. Despite its size, Switzerland was also home to more than 6,300 ultra wealthy residents last year — more than all but a handful of countries. Also helping to make U.S. properties more appealing, or at least more affordable, is the considerable appreciation of the Swiss franc against the dollar over the past five years, up nearly 27% in that time.

1. United Arab Emirates

> Growth in prospective homebuyers: 352.2%
> Share of int’l prospective buyers: 1.1% (12th highest)
> GDP per capita: $29,877 (31st highest)
> Ultra high net worth population: 1,050 (26th highest)

While UAE residents accounted for just 1.1% of RealtyTrac’s international searches, interest in U.S. property from the country has boomed. Between 2009 and 2013, the number of UAE subscribers rose by 352%, the largest percentage increase of any country. One reason may be the relatively high number of residents who can afford international property ownership. While the country has just 9 million residents, it had more than 1,000 ultra high net worth residents last year. Much of this wealth is likely connected to the country’s oil industry. Roughly 40% of the emirates’ GDP was tied to oil and natural gas output, according to OPEC, and oil prices have risen considerably in recent years.

 

Filed Under: Downtown Sarasota Real Estate, Sarasota Real Estate Market News Tagged With: , ,

3 major things you need to know about the 2014 housing market

March 28, 2014 by

housingwire.com 3/17/2014

The following list was put together by a veteran housing economist, asked by HousingWire for his opinion on the near-term future of the markets we cover daily. Here’s David Berson’s take on the 3 things you need to know about housing in 2014.

No. 1: 2014 should prove to be the strongest year for housing activity since before the Great Recession

Housing activity (home sales and housing starts) has increased modestly over the past several years, but is still at levels well-below sustainable trends. For both economic and demographic reasons, 2014 should be the year when activity reaches the highest level since 2006/2007.

Propelling home sales are job growth and housing affordability. The latter reflects the interplay of household income, mortgage rates and house prices. In 2013, while housing activity picked up, it was a year when job growth remained low and virtually unchanged from the previous year. Moreover, affordability, while still high, fell sharply in the second half.

Most economists expect an improved job market in 2014, with employment growth accelerating and the unemployment rate continuing to decline. That jobless rate drop will reflect more of a pickup in employment than further declines in the labor force participation rate. This will be the key factor improving housing demand this year, even if mortgage rates rise and affordability declines. While the housing market tends to do especially well when the job market improves and mortgage rates decline simultaneously, that combination of events occurs only rarely.

More often, either job gains accelerate while mortgage rates rise, or job gains decline while mortgage rates drop. Typically, housing activity expands in the former case and contracts in the latter. People buy homes when their job and income prospects improve – even if it’s more expensive to do so – rather than buy when it is inexpensive to do so but they’re worried about keeping their jobs.

No. 2: Demographics should start to favor housing activity

The demographic factor most affecting the housing market is household formations. Newly formed households may buy or rent, but they reside somewhere as an independent unit. On average, roughly 1.2 million households form every year in the United States and they each demand a housing unit. Household formations are affected by the job market, as people “double-up” when worried about their job and income-earning prospects.

The Great Recession and the modest job recovery in the years following induced many people who might have lived independently to move in together. That’s most noticeable in the rise in the share of young adults living with their parents, primarily because of the weak job recovery.

Reflecting the slow pace of household formations, there is an increasing pent-up demand for households. After all, most of these young adults would prefer the freedom of being on their own (and their parents really don’t want them as full-time residents, either). We estimate the economy is short by more than three million households.

If the economy expands at a faster pace this year, bringing a more rapid rate of job creation, that should translate into more households, raising housing demand. We won’t see all three million missing households return to the housing market at once. (That wouldn’t be a good thing for the housing market anyway, since that would be on top of the 1.2 million households that normally would develop this year; such a surge would swamp the existing housing supply). Beginning in 2014, the pace of household formations should accelerate to an above-trend pace for several years, pushing up housing demand.

No. 3: Mortgage availability shouldn’t worsen and may improve

Mortgage credit isn’t nearly as easy to get as it was during the housing boom, and it shouldn’t be. Still, compared with recent years, mortgage availability has increased slightly. And reasons exist for mortgage availability to be no worse in 2014 than in the past few years. Actually, it may be somewhat easier to get a mortgage loan.

With the dislocations in mortgage lending since the housing bubble popped,Fannie Mae and Freddie Mac have increased their share of the mortgage market significantly. When combined with lending from the Federal Housing Administration and the Veteran’s Administration, the government or government-sponsored share of mortgage lending has climbed to more than 90 percent in recent years. That is an untenable situation in the long run, but is unlikely to change much this year.

The good news is that new Qualified Mortgage lending rules from theConsumer Financial Protection Bureau exempt home mortgages that qualify for purchase or securitization from Fannie and Freddie. As a result, mortgage lenders won’t have to tighten their mortgage-underwriting requirements in response to QM as long as they sell their loans to the GSEs.

Additionally, the rise in mortgage rates already has reduced mortgage origination volumes as refinance activity declines. If mortgage rates rise further this year, as expected, then refinance activity will fall still more. In response, mortgage lenders probably will ease lending standards to the extent possible under the QM rules to boost lending activity by increasing purchase originations. As a result, the increase in new households expected to be created this year, spurred by a stronger job market, should find that qualifying for a mortgage loan will be somewhat easier in 2014 than in prior years.

Filed Under: Downtown Sarasota Real Estate, Sarasota Real Estate Market News Tagged With: ,

Florida predicted to be No. 1 market

November 5, 2013 by

HeraldTribune.com
October 2013

longboat-keyHousing analysts predict Florida’s real estate market will be the one to watch in 2014 — again.

The Home Buying Institute predicts the Sunshine State will surpass housing markets in California, Las Vegas and Phoenix to retake the national spotlight next year, edging out other recovering markets, according to a new report.

The institute’s prediction comes as housing supply is waning in some of Florida’s most popular areas, including Sarasota and Manatee counties.

At the same time, demand to purchase real estate is rising statewide, from a combination of retiree growth, job gains and other economic improvements.

For those reasons, the institute says Florida will be the top market to watch in 2014.

The report’s author did not return calls seeking comment Thursday.

“Just like the last decade, Florida is the market to watch,” said Jack McCabe, a Florida real estate consultant.

“During the last boom-bust cycle, what happened in Florida first spread through the rest of the country.  It was the tip of the iceberg and will be again.”

Realtors in Sarasota, Manatee and Charlotte counties have sold 18,487 single-family homes and condominiums through the end of September, an 18 percent increase compared to the same time last year.

That robust demand helped push median home prices by 18 percent over 2012, as well, to $199,000 last month, while the inventory of listings for sale sank to just a 4.4-month supply.

The Home Buying Institute, a Carlsbad, Calif.-based group run by Brandon and Melissa Cornett that seeks to educate buyers about purchasing residential real estate, expects prices to continue building in most U.S. cities, especially those in Florida.

The organization also believes real estate investors will continue their slow exodus from the market next year — helping potential buyers find homes they fancy.

The institute’s forecast also predicts mortgage interest rates will top 5 percent next year.

That could spell minor trouble for some housing markets around the country, but the impacts will likely be less significant in Florida, where an overwhelming number of home buyers are now using cash for their purchases, according to the report.

Overall, the institute sees Florida in 2014 experiencing a housing market that continues to favor sellers over buyers, and that the economic trends in the state could influence the nation as a whole.

“Florida is once again going to be a very good indicator,” McCabe said.

Filed Under: Downtown Sarasota Real Estate, Sarasota Lifestyle, Sarasota Real Estate Market News Tagged With: , ,
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