More Singles Than Ever: How It Affects Real Estate

CHICAGO – Sept. 15, 2014 – It’s the age of “selfies,” and more adults stick to themselves.  Single Americans now make up more than half of the adult population, the first time the number of singles has passed the 50 percent mark since the government began tracking the data in 1976.

About 124.6 million Americans indicated they were single in August, or 50.2 percent age 16 or older, according to new data from the Bureau of Labor Statistics. The percentage has been gradually trending upward since the beginning of 2013.

The rise of single households has “implications for our economy, society and politics,” writes Edward Yardeni, president of Yardeni Research Inc., in a report called “Selfies.” He called the proportion of singles today “remarkable.”

What are the implications for real estate?

Singles, particularly younger professionals, are more likely to rent than own a home. They are less likely to have children, and the growth in single households likely will exaggerate income inequality, Yardeni notes.

“While they have less household earnings than married people, they also have fewer expenses, especially if there are no children,” Yardeni writes in his report.

The number of never-married adult Americans has been on the rise, too, increasing to 30.4 percent from 22.1 percent in 1976. The number of divorced, separated or widowed adults also has risen up to 19.8 percent from 15.3 percent.

Some real estate analysts are expecting an increase in singles heading into homeownership in the coming years. For example, single women make up the second largest segment of home purchases, with one out of every five homes purchased by a single woman, according to National Association of Realtors® data. More than 25 million single women over the age of 45 – divorced, widowed or never married – also make up a growing number of homeowners, real estate professionals report.

Some builders cater to this growing segment, reportedly adding two master bedrooms to appeal to the 40 percent of single women who choose to have non-romantic roommates, according to AARP surveys.

Source: “Is Everybody Single? More Than Half the U.S. Now, Up From 37% in ’76,” Bloomberg News (Sept. 8, 2014) and REALTOR® Magazine Daily News

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

New Meaning For Cash Sales In Florida Real Estate

In May 2014, the percentage of Florida Real Estate closed sales that were, in fact, all cash sales for Pinellas County was 67.4%.  Up until recently, cash sales as a percentage of sales has been used to indicate the number of investors in the market.  Why?  Investors are far more likely to have the funds available to purchase a home up front, whereas the typical homebuyer requires a mortgage or some other form of financing.

Well… there is a new cash buyer!  Although mortgage rates are still at near an all-time low, people are paying cash to avoid the mortgage process altogether.  About 29 percent of non-investment buyers used cash to fund their housing transactions in the first quarter of this year – the highest level on record, according to data compiled by Bloomberg.

Who are they? Baby boomers make up a large bulk of these all-cash deals, says Lawrence Yun, chief economist for the National Association of Realtors®.

“Cash purchases are on the rise because older homeowners who have decades of home-equity accumulation don’t want the hassle of a mortgage,” Yun says. “With the economy improving and the stock market at record highs, boomers are the ones who are driving the market.”  Meanwhile, the share of investors – who usually use cash – is dwindling, dropping in the first quarter to the lowest level since 2010.

“The whole investor class, the ones doing most of the cash purchasing until now, is stepping back,” Yun says. “Baby boomers are taking their place.”  Baby boomers have more equity than previous generations because they may have owned a home during a 30-year “housing bull market.” In April, the median price of an existing-home was $201,700 compared to $67,800 in 1982, when many boomers had purchased their first properties, Bloomberg reports.

What’s more, about 16.3 million Americans older than 60 owned their homes outright in 2012, up from 12.1 million in 2009, according to Census data.  Baby boomers are expected to remain a strong presence in the housing market much longer than previous generations, too.

They “will be buying and selling well into their 80’s because they are going to be active and healthier for a lot longer than their parents,” says John McIlwain, a senior fellow at the Urban Land Institute in Washington. “They are a rebellious generation, and they’re not going to go along with the idea of traditional retirement.”

Source: “Cash Property Deals Reach Record with U.S. Boomers Retiring,” Bloomberg Businessweek (June 2, 2014)

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

Florida Realtors Expect Prices To Rise Over 5%!

This is what we have been discussing!

WASHINGTON – March 24, 2014 – According to the just-released National Association of Realtors®’ (NAR) Realtors Confidence Index, members expect home prices to continue to rise over the next 12 months, but they expect them to do so at a moderate pace given tight credit conditions and lower home affordability.
The Florida Realtors Confidence Index is a monthly survey distributed to more than 50,000 real estate practitioners. It gauges their expectations about home sales, prices and market conditions. Overall, Realtors expect a median price increase of 3.9 percent over the next 12 months.
Florida is one of four states where practitioners predict the biggest increases – 5 to 7 percent – along with California, Alaska and Hawaii. Tight inventories have helped to lift home values in these areas, according to the survey.
“In states with booming economies like Washington, North Dakota, Texas, Michigan, and the D.C.-metro area, the expected price increase is about 3 to 5 percent,” according to the report.
Real estate professionals also expressed several concerns over the housing market holding back some buyers, particularly due to “unreasonably” tight credit conditions.
“Access to credit was often cited as a deterrent to home buying,” the report says. “About 13 percent of Realtors who did not close a sale in February reported having clients who could not obtain financing.” In those cases, about 6 percent of the professionals said their buyer gave up, while 7 percent said their buyer continued to seek new or other financing.

© 2014 Florida Realtors®

Florida’s housing market continues positive trends in Jan. 2014

ORLANDO, Fla. – Feb. 21, 2014 – Florida’s housing market reported more closed sales, higher median prices, more new listings, fewer days on the market and the continued stabilization of inventory in January, according to the latest housing data released by Florida Realtors®. Closed sales of single-family homes statewide totaled 15,000 last month, up 10.2 percent over the January 2013 figure.

“Price increases are continuing to improve home equity in areas across the state, and combined with still-low interest rates, it’s creating a great opportunity for sellers,” says 2014 Florida Realtors President Sherri Meadows, CEO and team leader, Keller Williams, with market centers in Gainesville, Ocala and the Villages. “We’re seeing homeowners ready to take that next step and list their properties for sale: Statewide, new listings for single-family homes in January rose 13.8 percent year-over-year, while new townhouse-condo listings rose 7.4 percent.

“And here at the start of a new year, January marked 26 consecutive months that we’ve seen increases in statewide median sales prices for both single family homes and town home-condo properties, year-over-year.”

Looking at Florida’s townhome-condo market, statewide closed sales totaled 7,377 last month, up 9.3 percent compared to January 2013. The closed sales data reflected fewer short sales in January: Traditional sales in Florida rose 20.4 percent for single-family homes and 16.9 percent for condo-townhome properties. Closed sales typically occur 30 to 90 days after sales contracts are written.

© 2014 Florida Realtors

Florida Insurance Rates – Shouldn’t They Go Down?

Last week Florida’s Chief Financial Officer, Jeff Atwater, asked a pertinent question about why Florida Insurance Rates aren’t coming down. In a letter sent to Florida’s insurance commissioner, Kevin McCarty, Atwater referred to one of the main costs for insurers, reinsurance, that has been coming down this year.  It has been reported that those costs have come down 15-20% yet those savings aren’t being passed on to consumers. He wants to know why and he wants to see Floridian’s insurance bills coming down.

“If insurance companies can justifiably raise rates on Florida families because the reinsurance market drives their costs up, they can certainly lower the costs for Florida families when reinsurance prices fall,” Atwater wrote.  Obviously McCarty’s office is preparing a response.  According to an article by the Associated Press, “Annual reports prepared by Florida’s Office of Insurance Regulation show that the department has been approving more than 100 rate hike requests a year since 2009, including requests to raise rates by double-digits.”

There is no question that the impact of Hurricane Andrew to SE Florida in 2002, as well as the storms in 2004 and 2005, took its toll on insurance companies. However, it is good to know someone is watching and ready to challenge when the costs should be reversing.
 

Home Values Near Public Transportation Performed Better During Recession

Suncoast Beach Trolly
Pinellas County Public Transportation

The age old adage in real estate of “location, location, location” added a twist during this past recession in regards to home values.  A new study released by the American Public Transportation Association (APTA) and the National Association of Realtors® (NAR) reveals that during the last recession home values of residential property located near public transportation with high-frequency service performed 42% better on average.

NAR (National Association of Realtors) Chief Economist Lawrence Yun said, “Higher home values reflect greater market demand for areas near public transportation. Transportation plays an important role in real estate and housing decisions, and the data suggests that residential real estate near public transit will remain attractive to buyers going forward. A sound transportation system not only benefits individual property owners, but also creates the foundation for a community’s long-term economic well being.”

These areas can provide access to up to five times as many jobs per square mile compared to other areas in the given region.  Additionally, these areas can have amenities such as lower transportation costs, increased walking access and more robust transportation choices.  Transportation costs can be reduced up to $351 a month for households in these areas.

The data from this survey suggests that residential real estate near public transportation with high-frequency service will remain attractive to buyers going forward.  Ultimately, this study illustrates that investing in public transportation can be a benefit to revitalizing the economy.  Mr. Yun added, “When consumers choose a home, they also choose a lifestyle. Shorter commutes and more walkable neighborhoods matter to a growing number of people, especially those living in congested metro areas.”

For more information on this study, go to http://www.realtor.org/reports/the-new-real-estate-mantra-location-near-public-transportation

 

Homeowner Tax Benefits Add Up

As April 15th nears yet again and you are preparing to pay Uncle Sam, don’t miss looking for homeowner tax benefits that may ease the pain of tax season.  While some Americans debate whether buying a home is still part of the American dream, it is fair to say that tax code remains highly favorable to people who own instead of rent.  Whether you were a first-time buyer, a longtime homeowner who refinanced, or a seller in 2012, there are a host of important deductions available.

HouseLogic.com, a consumer website created by the National Association of Realtors® (NAR) points out seven important tax tips for home owners:

1. Mortgage interest is your best friend. Taxpayers collectively get roughly $100 billion annually in mortgage interest breaks. If you bought a home or refinanced in the last few years, the savings are even more significant, as more than half your monthly payment goes toward interest.

2. Mortgage insurance is still deductible. There were fears that the deduction for personal mortgage insurance would fall victim to fiscal fights in Washington. However, Congress left it in place. That’s a huge boon to lower-income homeowners who often can’t afford a big down payment and must pay private mortgage insurance until they have at least 20% equity in their homes.

3. Taxes are tax deductible. It sounds odd and is frequently overlooked, but homeowners can deduct their local and state property taxes on federal tax returns. There also may be special property tax benefits for lower-income home owners based on your state or municipality of residence, so look into further breaks specific to your community.

4. Qualified renovations count. Fixing a leaky faucet or putting crown moulding in the living room is not tax deductible. But there are a number of items in the tax code that allow for tax breaks and credits. A host of items covered under residential energy efficiency can provide tax relief, including new solar panels or certain water heaters. There are also deductions available for home office improvements, as well as for medically necessary changes, such as an entry ramp or a handicap-accessible bathtub.

5. Unqualified renovations can count later.
While that addition might not be “necessary,” the expense could be an important part of reducing your tax burden when you sell. This is especially noteworthy in hot real estate markets or for homeowners sitting on big property appreciation. The IRS allows you only $250,000 of tax-free profit when you sell a primary residence, but you can deduct any renovations that boosted your home’s value from any total profit to get under that threshold. Find those receipts if you’re sitting on a big profit and planning to sell.

6. Claim selling costs.
If you sold a home in the past year, costs including title insurance, advertising, and real estate broker fees can be claimed. You can claim certain repairs to reduce capital gains on the sale, presuming they were made within 90 days of sale and clearly for the intent of marketing the property. If selling a home less than what you originally paid, look for a loss to offset other income… even if it is a loss carry forward to next year.

7. Don’t forget moving expenses.
If you bought a home in 2012, there’s a chance you did so because of a job-related move. If this is the case, you may be able to deduct some expenses, provided you have the receipts. You must have moved 50 miles or more, and the reasons for your move can’t be personal.

Home ownership can really pay off for many reasons!  Contact The Purtee Team today to discuss your homeownership goals for 2013 whether you are looking to buy or sell, we are the experts in the Tampa Bay, Florida  Area.

 *Homeowners should consult a tax professional for specific advice about their own transactions or circumstances. Information on The Purtee Team Blog should not be relied on as tax or legal advice.

 Read more: http://www.houselogic.com/news/taxes-incentives/home-is-where-the-tax-breaks-are-7-tips/#ixzz2NMlKuZdz

Forget ‘improving’ or ‘rebound’ – ‘Florida market is on fire’

Forget ‘improving’ or ‘rebound’ – ‘Florida market is on fire’ Florida Pool

Daily we receive articles of interest from Florida Realtors® and this one certainly caught our attention.

Lesley Deutch, senior vice president at John Burns Real Estate Consulting, said the “Florida market is on fire” in her latest update on the state’s housing market after having traveled the state of Florida recently and visited more than 20 communities. While recovery reports differ between Florida cities and urban areas, she reports five major trends:

1. Land prices. While the price of land continues to rise quickly statewide, Orlando feels the most pressure. Deutch says she saw some submarkets where “land and finished lot prices have now surpassed peak levels.” In Orlando, she sees developers buying raw land “just to gain a position and market share.”

2. Home prices. Some communities, such as Orlando and Naples, are seeing 1- to 2-percent new-home price increases monthly, Deutch says. The hallmarks of a seller’s market have also returned, such as lotteries. She expects a 2013 price increase of at least 10 percent in many Florida markets.

3. 55-plus market. Deutch reports a 20- to 25-percent jump in potential buyers interested in active adult living, according to builders in Southwest Florida. She also notes a boost in customer traffic in second- and third-tier markets.

4. Foreign buyers. It’s more than Miami, Deutch says. While in Orlando, she visited a sales office that had three active buyers: One from Brazil, one from Germany and one from China.

5. Foreclosures. While the state has a notoriously long foreclosure process, Deutch says banks are slowly releasing foreclosures. But investors continue to buy new foreclosures shortly after they hit the market.

Most of these 5 issues have been covered by The PURTEE Team in recent blogs.  I was just having a conversation yesterday with a builder who was complaining about land prices being too high.  It reminds me of conversations I had in late 2011 with buyers of beach property.  Those buyers listened to media doldrums even as we realtors saw the turn in the market.  Many sat on the sideline and missed golden opportunities to own premium real estate at a fraction of their former value!  She is right about the foreclosures, too. We see them gobbled up quickly as they hit the market.

There is an appetite out there for Florida property and it is even stronger with the relentless snow and cold weather the northern states have suffered this early spring… as we have enjoyed beautiful temperate climates.  Do you agree the Florida market is on fire? You should!  Use a professional to help you understand a good value in today’s market here in Tampa Bay. Contact us today.

Economist Expectations For 2013 Optimistic

USA Today recently surveyed prominent economists to determine economist expectations for the balance of 2013 and got optimistic results.  “After starting the year slowly, the economy will shift into a higher gear this summer and then grow for the next nine months at the fastest pace in three years, according to the median estimates of 46 economists.”  Part of this optimism is due to the government raising their estimate of average monthly job growth and increasing the forecast to 184,000 by 4th quarter.

The estimation is that the first half of 2013 will remain sluggish while the government deals with spending cut, but that mid-year should open up.  “What’s more, the economists expect the effects of the federal cuts to fade by the fourth quarter, with growth picking up to a 2.7 percent pace. They say the housing market is rebounding, a rising stock market is boosting consumer wealth, the European financial crisis is easing and Corporate America is cash-rich.”

What does this mean for the housing market here in Tampa Bay?  If the economists are right, it means the time to buy is right now.  Prices should be expected to rise by mid-year. For sellers, this is a great time to reconsider listing your property.  Unprecedented low inventory, a recovering economy and rising home value… combined with low interest rates can swing the pendulum back to sellers.  This is a changing market and often localized to specific areas.  There is no more important time to use a real estate professional than now.  The PURTEE Team  stays informed about the Tampa Bay market and stand by ready to help both buyers and sellers. Visit our website at www.floridagulfproperty.com or email us at info@floridagulfproperty.com 

Supply Of Homes For Sale Decreases – Demand On The Rise!

USA TODAY released national statistics last week showing nationwide the supply of homes for sale continueing to shrink.  They refer to year-to-year the first 2 weeks of January as down 14% in inventory.  Yet demand is up 9.2%!2012 Absorption Rate

Here in Tampa Bay, we have been watching the Absorption Rate eat up available inventory month after month.  This inventory turnover refers to how much of the existing inventory during the month was sold and removed from the market.  We saw the trend begin back in March of 2011… but look what happened in 2012, especially in single family homes!!!

The result? Home prices have nowhere to go but up. Many sellers who have been waiting on the sidelines until their home values come back up have been renting their homes or condos. But the lack of sellers in the market is not the only thing keeping the supply of homes for sale down.  According to Realty Trac,  there are fewer distressed properties for sale. Nationwide, foreclosure sales were down 7 percent through the first nine months of last year from the same period in 2011.  Here in Tampa Bay, of the 6101 listings left at the end of 2012 in Pinellas County only 17% of those were distressed. Yet 32.5% of those listings sold during the motn of December were foreclosures or short sales.  Currently, our supply of homes for sale is down to a meager 4 months supply… equating to only 1 home per buyer looking!

Looking for a home in this kind of market? It may not be easy. The PURTEE Team is very knowledgeable about the current market and how to maneuver in it. Contact Us Today!