Area Real Estate News & Market Trends

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April 29, 2022

Real Estate Market Update May 2022 Video

Curious about the real estate market? Watch for current statistics, myth busters, and tips. If you have questions about buying or selling in 2022, reach out - I'd love to be a resource to you! Want to get updates like this in your inbox? Head over to the chat box 💬 and let us know.

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Posted in Market Updates
April 29, 2022

Real Estate Market Update May 2022

May Real Estate Update by cassidyannco

Posted in Market Updates
April 14, 2022

First-Time Homebuyers Find it Takes More Than Money

First Time Home Buyer Strategy

First-Time Homebuyers Find it Takes More Than Money

Many homebuyers may find the first 48 hours are crucial to either make or break a deal – and often contingencies like taking it “as is” matter, too.

CHARLOTTE, N.C. – In this current mad dash to find housing, the first 48 hours are proving to be crucial to either make or break a deal, especially for prospective middle-class homebuyers.

Just ask Jonathan Sigrist and Krystal Dickison, of Charlotte, North Carolina. Within a 24-hour span, the couple saw a home they really liked, went on a tour the next day and put in an offer that evening.

Their real estate agent, Nelvia Bullock, had advised them the seller already had multiple offers. They better act quickly if they wanted it, she said, and even should consider making “certain contingencies.” The couple agreed to some, including taking the home in its current state and offering $13,000 over the asking price.

It worked. The couple will close on the home later this month in one of the toughest housing markets in the country.

“It’s happening. It was amazingly stressful. We’re first-time homebuyers and we really had no idea what was going on,” Sigrist said. “We both had mixed emotions, excited about the possibility of getting it, but also sad that we might lose it, all in a matter of hours.”

Affordable homes in short supply

The scramble for housing for the middle class has been a struggle for decades, housing experts say. According to a 2021 study, “Housing is Critical Infrastructure: Social and Economic Benefits of Building More Housing,” commissioned by the National Association of Realtors, “underbuilding (has) placed a significant strain” on the for-sale housing market. The inventory of available homes available to buy has steadily declined even before the COVID-19 pandemic, which only exacerbated the problem.

Now, first-time homebuyers seeking to take advantage of still-low mortgage rates also must contend with a lack of affordable housing. This would also include millennials like Sigrist and Dickison wanting to be homeowners.

For example, Charles Maurer, a real estate agent based in Cleveland, said he could put a house listing up on a Friday morning and “get 50 to 60 calls by that afternoon” and likely have the home sold by Sunday night.

“Houses used to be on the market for weeks, sometimes months at a time,” Maurer said. “Now we’re surprised if they’re not sold within two or three days.”

Maurer, who said about 70% of his clients are middle-class, believes that “they are what drives this country’s economy and have to be made a priority” when it comes to housing.

Last year the median price of an existing single-family home jumped to an all-time high of $357,900, up 23% from a year earlier, according to the National Association of Realtors. About 94% of 183 metropolitan areas that were measured notched double-digit gains, up from 89% from the previous year, the organization said.

Home shortage of around 6 million

It was long thought that housing shortages occurred in only certain regions of the United States, such as the Northeast and Midwest, but now “the underbuilding gap extends across almost every major city in the country,” the Realtor-commissioned report said.

The report also said the housing unit shortfall ranges between 5.5 million and 6.8 million, despite an annual average of 1.5 million new housing units completed in the U.S. and a 1.7 million spike in 2020 alone. “New construction would need to accelerate to a pace that is well above the current trend, to more than 2 million housing units per year” to close the gap, the report said.

“Even if building were to continue at the current level – the most rapid pace in more than a decade – it would still take more than 20 years to close the 5.5-million-unit housing gap,” the report said.

The report came several months before House Democrats passed President Joe Biden’s now-stalled $1.75 trillion Build Back Better Act. The bill includes about $170 billion for what presumably would be the nation’s largest investment for affordable housing, with a goal to build or preserve more than a million affordable homes.

Housing market outlook for 2023

That 1 million figure, however, may only scratch the surface. Jessica Lautz, the Realtor association’s vice president of demographics and behavioral insights, estimates a nationwide shortage of between 4.5 million to 6.5 million housing units.

While the association doesn’t estimate the shortfall of affordable versus higher-priced homes, Lautz said that “it could be argued the vast majority of homes needed today would be affordable properties as prices continue to rise out of reach to potential home buyers.”

“There’s far more demand but less supply for housing overall,” Lautz said. “Naturally, affordable housing falls into that same category.”

There’s long been a shortage of housing before the pandemic, said Jodi Hall, president of Nationwide Mortgage Bankers. Now the problem may be further compounded, Hall believes, by materials “sitting in the Suez Canal” because of hundreds of container ships being stuck on either side of the canal.

Hall also said there’s a lack of incentives to build affordable housing, adding that the rising costs of supplies to build homes is a primary reason.

First-time homebuyers must be ‘the quick and the creative’

“First-time homebuyers need to be aggressive wherever they can to win outright,” Hall said. “It’s a big battle out there.”

Brittany Lambrechts Camacho knows full well about the dearth of affordable housing. Based in the uber-competitive Washington, D.C., and northern Virginia markets, she said she’s never seen anything like this in her 16 years as a real estate agent.

She said first-time homebuyers now have to possess other traits besides having the money to get that house.

“They must be the bold, the fast, the quick and the creative,” she said. “Lace up your sneakers and let’s go.”

Lambrechts Camacho said middle-class and homebuyers in general also may have to make some concessions, including paying over the listing price, buying the home as-is and waiving inspections in order to be in the chase.

“These first-time homebuyers are doing what feels like insurmountable things to get a home, and that makes me so sad,” Lambrechts Camacho said.

Deal sweeteners to close out sale

But that’s the way the game is played today as homebuyers might have to add “deal sweeteners,” said Bullock, the real estate agent in the metro Charlotte area who helped Sigrist and Dickison get their home.

Those “sweeteners” could include paying any fees associated with due diligence (examining the physical and financial condition of the property and the area where the property is located), paying the seller’s attorney fees or paying cleaning costs after the seller leaves the home. Buyers might allow the seller to stay in the property a month for free after closing as well as other contingencies, Bullock said.

“As a buyer, you might not have a lot of skin in the game money-wise, but you might have something that would be desirable to a seller,” said Bullock, who urges homebuyers to have resources available ahead of time in case they must “pad their offer.”

Sigrist, a software engineer, and Dickison, an interior designer, were grateful that Bullock, who worked overnight to help them, was available to guide them through their options.

Sigrist recalls the restless nights hoping their bid would be accepted. Dickison remembers that her heart was racing as well. “I kept saying, ‘Maybe this is our shot,’” Dickison said.

The couple’s new home keeps them within their neighborhood, near the apartment where they have lived for five years. With the move, Sigrist can still drive only 15 minutes to work downtown and Dickison will soon commute via rail.

They have big plans, as Dickison sees their new home as more than just an investment.

“I see this house as a way to further our identities, what we want out of life, to put down some roots and explore our possibilities,” she said.

And maybe even getting out of your comfort zone, or in Ramon Patterson’s case, expand your range. The life insurance underwriter and assistant church pastor and Bullock and her team had been looking for months to buy a home in the Charlotte metro area with no such luck.

He lost count of how many homes he’d either looked (dozens) at or made an offer on (perhaps five), as in all cases, he was priced out. But, as luck would have it, as Patterson began to expand his geography, Bullock’s team found him a rebuilt three-bedroom, two-bathroom house in suburban Lancaster, South Carolina, about 30 minutes from downtown Charlotte.

“And I didn’t have to compete for it. I put an offer in the next day, and that was on a Monday,” Patterson said. “And on Tuesday, I got a call. They said, ‘You got the house!’ Talk about a relief!”

Time was ticking for Patterson who did not want to renew his apartment next month as the rent was increasing in his words, “to the price of a mortgage.” He credits Bullock and his patience to become a first-time homeowner.

“It’s OK to temper your expectations or otherwise, you will be a sad puppy,” Patterson said. “You will hear a million no’s, but stay grounded and rooted until you hear that magic word, ‘Yes!’”

Copyright © 2022, USATODAY.com, USA TODAY

March 31, 2022

Proof that Prices Won’t Fall? The New-Home Market

New Home Construction

There’s not enough supply (homes) to meet demand, with little relief in sight. The U.S. needs about 3M more homes, and it will take years for builders to catch up.

BOSTON – Emerson Claus has been building houses for 45 years. But he has never faced delays like he is now trying to get basic building materials. “I had a client ask me to add a door,” he says at a job site outside Boston. “We just waited six months to get it.”

 

“That’s a door in a frame,” Claus says, exasperated. “That’s kind of crazy.” He says appliances can be even worse. “A dishwasher, if you can find the model you want right now, you might wait a year for it.”

 

By one estimate, the U.S. is more than 3 million homes short of the demand from would-be homebuyers. Pandemic-related supply chain problems aren’t helping. They’re adding tens of thousands of dollars in cost to the typical house. But the roots of the problem go back much further – to the housing bubble collapse in 2008.

 

“What I call a bloodbath happened,” says Claus. It was the worst housing market crash since the Great Depression. Many homebuilders went out of business. Claus was building houses in Florida when the bottom fell out.

 

“A lot of my tradespeople found other work, went and got retrained for new jobs in law enforcement, all sorts of jobs,” says Claus. “So the workforce was somewhat decimated.”

 

A few years later, as Americans started buying more homes again, building stayed below normal. And that slump in building continued for more than a decade. Meanwhile, the largest generation, the millennials, started to settle down and buy houses.

 

And that’s the main reason we’ve ended up millions of homes short – builders for many years just weren’t building enough to keep up with demand. That lack of supply has pushed home prices to record levels – up nearly 20% last year alone.

 

Gradually, though, many homebuilding companies recovered. Claus is now the president of the Home Builders and Remodelers Association of Massachusetts. Before COVID hit, he had a crew of nine full-time workers again. That’s not counting the many subcontractor electrician, roofing and plumbing companies he works on homes with.

 

“We always need guys,” says Rene Landeverde, Claus’ foreman. He’s originally from El Salvador, and for the past 10 years he has helped Claus and other local builders find a lot of other workers to hire and train. “I’ve been bringing guys to companies, like maybe 200 guys in my whole construction experience.”

 

But then the pandemic hit. Things shut down and some of those workers left. Now, with unemployment so low, Landeverde can’t find people to hire like he used to.

 

“It’s a lot harder,” he says. “They’ve been finding other work.”

 

Claus says that’s made it more difficult for builders to respond to the surge in demand for homes during the pandemic.

 

“If I had twice as many guys, I would still not have enough,” says Claus, who now has five employees. “And my subcontractors, they’re all hurting for people.”

 

There’s another very big roadblock to home construction.

 

“Land,” says Claus. “I was just trying to buy a piece of land to build five homes on it. Unfortunately, that land went to somebody else that may put one or two on it.”

 

Claus says he wants to build more attached townhouses, or smaller homes on less land. That’s what many first-time homebuyers can afford to buy. But in many places, zoning rules won’t let you buy land and divide it up – you can only build one house with a big yard.

 

Zoning challenges

 

Overly restrictive zoning is a big problem nationally, says Robert Dietz, the chief economist with the National Association of Home Builders. “In certain neighborhoods you simply cannot build townhouses.”

 

“You have to build single family units on lots that are bigger than the market wants,” Dietz says. “This is not a free market choice. It’s a government-imposed rule.”

 

He says that in many parts of the country, the classic NIMBY (not in my back yard) opposition stops higher-density units from being built. Existing homeowners who don’t want more traffic and more homes in their neighborhood keep what he says are outdated, exclusionary zoning rules in place.

 

So to make a profit, builders like Claus are left doing renovations or tear downs – buying an older home, knocking it down, and building a bigger, more expensive new one.

 

“We are seeing a lot of knockdowns,” Claus says. “But it doesn’t add to the housing stock. You’re replacing something, you’re not adding to it, so the net effect isn’t the best.”

 

Changes in zoning can make a big difference. Some states and towns have been changing the rules to allow in-law rental apartments to be built onto existing houses. These are called accessory dwelling units, or ADUs.

 

“Twenty percent of remodelers indicate in the last year they’ve undertaken an ADU project, and the typical one can cost anywhere between $100,000 and $200,000,” Dietz says. That’s good for the supply of rental housing, which is also very tight. But Dietz says we also need a lot more homes for people to buy.

 

“That could be a townhouse,” he says. “It could be a single-family detached home on a small lot that’s roughly 1,800 to 2,100 square feet, that’s appropriate for effectively a newly married couple that’s moving out of their first apartment and is getting into their first rung of homeownership.”

 

Right now, Claus says that because of the restrictive zoning rules, he doesn’t have any new home projects lined up that will put a house like that in a place there wasn’t a home already.

 

Copyright © 2022 NPR, © KNOW Minnesota Public Radio, Copyright © 2022 APM. All rights reserved.

 

March 30, 2022

The Best Week to List Your Home Is Right Around the Corner

https://www.careteamproperties.com/cma/property-valuation/https://www.careteamproperties.com/cma/property-valuation/

March 24, 2022

NAR Report: Millennials Make Up 43% of Homebuyers

In last year’s generational report, millennials made up 37% of homebuyers. Gen X, however, bought the most expensive homes at a median price of $320K. WASHINGTON – The share of millennial homebuyers increased significantly over the past year, according to the National Association of Realtors® (NAR) 2022 Home Buyer and Seller Generational Trends report. The report looks at the similarities and differences of recent homebuyers and sellers across generations.  In addition to be the biggest share of buyers, millennials are also the most likely generation to find the home they ultimately purchase via the internet and the most likely to use a real estate agent.  In the latest report, the combined share of younger millennial (23 to 31 years old) and older millennial buyers (32 to 41 years old) rose to 43% in 2021, up from 37% the year prior. Almost two out of three younger millennials (65%) found the home they ultimately purchased on the internet, a number that gradually decreases with older generations. While 87% of survey respondents purchased their home through an agent, it was 92% for younger millennials and 88% for older millennials.  “Some young adults have used the pandemic to their financial advantage by paying down debt and cutting the cost of rent by moving in with family. They are now jumping headfirst into homeownership,” says Jessica Lautz, NAR’s vice president of demographics and behavioral insights. “While young buyers use new tech tools, they also use real estate agents at higher rates than other buyers to help find the right home and negotiate the terms of the transaction.”  Buyers from all generations agreed about the top reasons for using an agent: they wanted help finding the right home to purchase, negotiating the terms of sale and negotiating the price. The silent generation – those between the ages of 76 and 96 – as well as younger millennials were also more likely to want their agent to help with paperwork.  Those between the ages of 42 and 56 – Generation X – had the highest median household income at $125,000. They bought the most expensive and second-largest homes at a median price of $320,000 and size of 2,300 square feet, respectively. Older millennials purchased the largest homes at 2,400 square feet, and the silent generation bought the smallest at 1,800 square feet. Across all generations, the largest share of buyers purchased in suburban areas (51%) and small towns (20%).  “Not surprisingly, younger generations typically upgraded in size and price while older generations purchased more affordable properties,” Lautz says. “The majority of all generations bought single-family homes at higher shares than other housing types, and younger buyers dispelled the myth that they are flocking to city centers. When it comes to location, the suburbs and small towns are the places to buy.”  Three out of five of recent buyers (60%) were married couples, 19% were single females, 9% single males and 9% unmarried couples. The highest share of unmarried couples were younger millennials at 21%.  Single-female buyers significantly outnumbered single-male buyers across all generations. The highest percentage of single-female buyers was in the silent generation at 27%.  The study also found that first-time home buying among younger generations is on the rise, with over 4 out of 5 younger millennial homebuyers (81%) purchasing for the first time. Just under half (48%) of older millennial buyers were first-time buyers.  “While the pandemic allowed many potential buyers to save for a down payment, demographics played a key role,” Lautz says. “There is a wave of millennial buyers aging into the traditional first-time buyer age range.”  Boomers made up the largest share of home sellers at 42%, although the percentage of millennial sellers is on the rise, increasing from 22% to 26% over the past year. Lautz says that, for the first time, it’s now more likely for an older millennial to be a first-time seller than a first-time buyer.  “Many factors can contribute to the decision to buy or sell a home,” Lautz says. “For all home buyers under the age of 57, the main driver was the desire to own a home of their own. Among those 57 and older, the desire to be closer to friends and family was the top reason, followed by the desire for a smaller home.”  Younger generations tended to move shorter distances when relocating. Among all ages, there was a median of 15 miles from the homes where recent buyers previously resided and the homes that they purchased. That distance was lowest among younger millennials (10 miles) and highest among older boomers (35 miles).  Overall, buyers expected to live in their homes for 12 years, down from 15 years last year. For younger millennials and the silent generation, the expected duration was only 10 years, compared to 20 years for younger boomers.  Debt continues to be a significant barrier for many when attempting to buy a home. Both Generation X and younger boomers delayed purchasing a home for five years due to debt, the longest of all age groups. Younger millennials had the highest share of student debt at 45%, with a median amount of $28,000. Twenty-seven percent of younger millennials cited that saving for a down payment was the most challenging step in the home buying process, compared to just 1% for older boomers. Nearly one in three – 29% – of younger millennials received down payment help in the form of a gift or loan from a friend or relative and 24% lived with friends or family, directly saving on rental costs.  Despite this hurdle, a vast majority of buyers have a positive outlook on homeownership. Eighty-six percent of all buyers reported they viewed a home purchase as a good investment, and roughly nine out of 10 people (89%) said they’d recommend their agent for future services.  “A truth across all generations is that homeownership is seen as a cornerstone of the American dream,” says NAR President Leslie Rouda Smith. “From building personal wealth and fostering communities, to strengthening social stability and driving the national economy, the value of homeownership is indisputable. Home buyers continue to turn to Realtors as a trusted resource for helping find the right home and successfully navigating this increasingly complex process.”  © 2022 Florida Realtors®

 

In last year’s generational report, millennials made up 37% of homebuyers. Gen X, however, bought the most expensive homes at a median price of $320K.

WASHINGTON – The share of millennial homebuyers increased significantly over the past year, according to the National Association of Realtors® (NAR) 2022 Home Buyer and Seller Generational Trends report. The report looks at the similarities and differences of recent homebuyers and sellers across generations.

In addition to be the biggest share of buyers, millennials are also the most likely generation to find the home they ultimately purchase via the internet and the most likely to use a real estate agent.

In the latest report, the combined share of younger millennial (23 to 31 years old) and older millennial buyers (32 to 41 years old) rose to 43% in 2021, up from 37% the year prior. Almost two out of three younger millennials (65%) found the home they ultimately purchased on the internet, a number that gradually decreases with older generations. While 87% of survey respondents purchased their home through an agent, it was 92% for younger millennials and 88% for older millennials.

“Some young adults have used the pandemic to their financial advantage by paying down debt and cutting the cost of rent by moving in with family. They are now jumping headfirst into homeownership,” says Jessica Lautz, NAR’s vice president of demographics and behavioral insights. “While young buyers use new tech tools, they also use real estate agents at higher rates than other buyers to help find the right home and negotiate the terms of the transaction.”

Buyers from all generations agreed about the top reasons for using an agent: they wanted help finding the right home to purchase, negotiating the terms of sale and negotiating the price. The silent generation – those between the ages of 76 and 96 – as well as younger millennials were also more likely to want their agent to help with paperwork.

Those between the ages of 42 and 56 – Generation X – had the highest median household income at $125,000. They bought the most expensive and second-largest homes at a median price of $320,000 and size of 2,300 square feet, respectively. Older millennials purchased the largest homes at 2,400 square feet, and the silent generation bought the smallest at 1,800 square feet. Across all generations, the largest share of buyers purchased in suburban areas (51%) and small towns (20%).

“Not surprisingly, younger generations typically upgraded in size and price while older generations purchased more affordable properties,” Lautz says. “The majority of all generations bought single-family homes at higher shares than other housing types, and younger buyers dispelled the myth that they are flocking to city centers. When it comes to location, the suburbs and small towns are the places to buy.”

Three out of five of recent buyers (60%) were married couples, 19% were single females, 9% single males and 9% unmarried couples. The highest share of unmarried couples were younger millennials at 21%.

Single-female buyers significantly outnumbered single-male buyers across all generations. The highest percentage of single-female buyers was in the silent generation at 27%.

The study also found that first-time home buying among younger generations is on the rise, with over 4 out of 5 younger millennial homebuyers (81%) purchasing for the first time. Just under half (48%) of older millennial buyers were first-time buyers.

“While the pandemic allowed many potential buyers to save for a down payment, demographics played a key role,” Lautz says. “There is a wave of millennial buyers aging into the traditional first-time buyer age range.”

Boomers made up the largest share of home sellers at 42%, although the percentage of millennial sellers is on the rise, increasing from 22% to 26% over the past year. Lautz says that, for the first time, it’s now more likely for an older millennial to be a first-time seller than a first-time buyer.

“Many factors can contribute to the decision to buy or sell a home,” Lautz says. “For all home buyers under the age of 57, the main driver was the desire to own a home of their own. Among those 57 and older, the desire to be closer to friends and family was the top reason, followed by the desire for a smaller home.”

Younger generations tended to move shorter distances when relocating. Among all ages, there was a median of 15 miles from the homes where recent buyers previously resided and the homes that they purchased. That distance was lowest among younger millennials (10 miles) and highest among older boomers (35 miles).

Overall, buyers expected to live in their homes for 12 years, down from 15 years last year. For younger millennials and the silent generation, the expected duration was only 10 years, compared to 20 years for younger boomers.

Debt continues to be a significant barrier for many when attempting to buy a home. Both Generation X and younger boomers delayed purchasing a home for five years due to debt, the longest of all age groups. Younger millennials had the highest share of student debt at 45%, with a median amount of $28,000. Twenty-seven percent of younger millennials cited that saving for a down payment was the most challenging step in the home buying process, compared to just 1% for older boomers. Nearly one in three – 29% – of younger millennials received down payment help in the form of a gift or loan from a friend or relative and 24% lived with friends or family, directly saving on rental costs.

Despite this hurdle, a vast majority of buyers have a positive outlook on homeownership. Eighty-six percent of all buyers reported they viewed a home purchase as a good investment, and roughly nine out of 10 people (89%) said they’d recommend their agent for future services.

“A truth across all generations is that homeownership is seen as a cornerstone of the American dream,” says NAR President Leslie Rouda Smith. “From building personal wealth and fostering communities, to strengthening social stability and driving the national economy, the value of homeownership is indisputable. Home buyers continue to turn to Realtors as a trusted resource for helping find the right home and successfully navigating this increasingly complex process.”

© 2022 Florida Realtors®

Posted in Market Updates
March 16, 2022

Will Ukraine War Impact Fla. Real Estate?

Will Ukraine War Impact Fla. Real Estate?

 

On the one hand, Fla. is the No. 1 state for Russian RE investing – 29% of all U.S. purchases. On the other, Russian buyers make up only 0.8% of all foreign purchases.

NAPLES, Fla. – Over the past six years, Russian buyers of U.S. real estate have preferred the sunny coasts of Florida over property in any other state in the nation. Wealthy Russians have reportedly bought so many luxury condo properties in the north Miami city of Sunny Isles Beach that some have termed it “Little Moscow.”

“They love to be here, and they like to spend their money and enjoy their life,” Lana Bell, a South Florida real estate agent told NewsNation.com.

But it’s not just the wealthy Russian elites seeking Florida sunshine.

Across the state from Warm Mineral Springs in North Port all the way up to small town of Steinhatchee near the Panhandle, Russians and Eastern Europeans have established communities, according to population data from the U.S. Census Bureau’s American Community Survey.

Over the past six years, 29% of Russian real estate transactions in the United States occurred in Florida, the most in the nation, according to a report from the National Association of Realtors® (NAR).

But even as countries across the world impose sanctions on Russia for invading and waging a brutal war against its neighbor Ukraine, the impact to U.S. home or property prices is not expected to be meaningful, even without any Russian purchases of Florida real estate.

“Russia has little direct impact on the U.S. real estate market as it accounted for less than 1% (0.8%) of all foreign buyers who purchased U.S. residential property from April 2015 through March 2021, according to data from NAR’s survey of foreign buyer transactions of its members,” covering about 5,000 respondents, the report said. Any effect from the loss of Russian purchases would tend to be at the high end, as the NAR’s report notes that Russian buyers buy more luxury properties than the average Florida buyer.

Still, with the transition of the pandemic to a different phase, the loss of Russian buyers could be offset by the resumption of purchases by people from other countries, as well as within the U.S.

Craig Cerreta, the managing broker for Premier Sotheby’s International Realty’s Sarasota office, said the pandemic caused a near shutdown of foreign buyers, but that the segment has been bouncing back in recent months.

During the COVID pandemic, real estate prices have drastically increased in Florida as migration brought new residents to the state, with people retiring early or enjoying the ability to work remotely.

Tight supply

Historically, Cerreta said, Canadians, followed by residents of the United Kingdom, have accounted for the majority of international real estate transactions in the Sarasota market.

“There is no question that they (Russian purchasers) are small” locally, he said. “But they are typically high-end buyers.”

The NAR data says that the average Russian real estate transaction was about $650,000. The average for all international buyers was about $480,000.

But, with the demand seen for Florida properties, combined with historically low number of properties for sale, any loss of Russian purchases are being more than made up from demand from other buyers, Cerreta said.

Cerreta recently sold a home he owned in the Sarasota area. During the open house, more than 170 people viewed the residence and 21 people made an offer. Three of the offers came from people in California, something that surprised the longtime real estate agent, as Californians have historically not been a large market for the west coast of Florida.

Any loss of demand from Russian buyers for luxury properties or other property types won’t be felt in the Sarasota market, he said.

In February, 72% of all real estate sales in the Sarasota market closed at or above the list price compared to 43% at or above list price in February 2021, Cerreta said. “There’s not enough inventory to meet demand,” he said of the Sarasota market.

Sergei Sokolov, a Realtor with Sarasota’s Michael Saunders & Co., was born in Ukraine but moved to the United States when he was 5 years old. The now-47-year-old real estate professional, fluent in Russian and Ukrainian, said Russian speakers often want a Realtor who speaks their language.

The first house he sold in Sarasota in 2004 was to a Russian speaker, and he does about three or four transactions a year. Sokolov specializes in entry level homes typically in the $350,000 to $400,000 price range, with the majority of his Russian-speaking buyers already living in the U.S. or Canada and unlikely to be impacted by the Russian-Ukrainian war.

“I don’t expect there to be much of an impact on my business,” he said. “There’s just a lot more demand than there is supply.”

Varied buyers

The next closest U.S. state for Russian buyers was Georgia with 16% of all Russian purchases of U.S. real estate, roughly 13 percentage points behind Florida. New York (13%), California (8%) and Illinois (5%) rounded out the top five states for total transactions from Russian buyers.

The NAR report said that even in Florida, purchases of real estate made by Russians accounted for just 0.2% of the Sunshine State’s real estate transactions from July 2020 to June 2021. Those numbers may be skewed as the pandemic caused many governments to restrict travel to other countries.

A 2020 profile on international residential transactions in Florida conducted by the NAR with Florida Realtors, the largest trade organization in the state, concluded that foreign buyers accounted for $15.6 billion in real estate transactions from August 2019 to July 2020 – about 11% of the state’s sales. The total transaction volume for Florida real estate in that time period was $137 billion dollars.

However in that report that largely accounted for sales just prior to the pandemic, Russia did not rank among the top 15 counties for any Florida metro besides Miami. The Miami metro market, the largest in Florida, had just 2% of home sales go to Russian buyers.

The largest group of foreign buyers by transaction volume came from Latin America and the Caribbean with about 37% of the total value of homes purchased by international citizens.

Canadian buyers had the most transactions at 21% followed by Brazil (7%), Argentina (6%), Venezuela (5%), Columbia (5%) and the United Kingdom (5%).

The metro area of Miami-Fort Lauderdale-West Palm Beach had the lion’s share of foreign buyers with 47.3% of all purchases. The Tampa-St. Petersburg-Clearwater metro accounted for 11%; Orlando-Kissimmee-Sanford had 9.7%, North Port-Sarasota-Bradenton had 6.9% and Cape Coral-Fort Myers came in at 4.7%.

Larger economic issues

While Russians account for a tiny fraction of all real estate purchases in Florida, the real impact of the conflict may be felt at the gas pump as international buyers cut ties with Russian energy. President Joe Biden announced a ban on Russian oil earlier this week.

Chris Jones, president of Florida Economic Advisors and a University of South Florida faculty member at USF in the economics department, agreed with the real estate experts that the reduction in demand from Russian buyers for U.S. real estate won’t shift home prices in Florida.

However, the impact of rising gas prices could be dangerous for the U.S. economy, he said.

He anticipates that gas prices will increase at least another 50 cents before the end of May, with peak price per gallon of gasoline surpassing $5 per gallon this year. As people pay more at the pump, they have less money to spend on goods and services that drive the economy, which he believes will lead to a decrease in the nation’s economic output.

He said he fears that the American economy could be headed toward “stagflation” because of the rising gas prices. Stagflation happens when an economy has rising inflation at the same time as slowing economic output.

“We’re already halfway there,” he said, pointing to rising inflation.

Rising gas prices will also have an impact by raising prices on nearly all goods and services which could then cause fewer people to be able to afford to purchase residential property.

Less demand, caused largely by rising gas prices, would then impact Florida’s real estate market.

 

 

© 2022 Journal Media Group

Source: https://www.floridarealtors.org/news-media/news-articles/2022/03/will-ukraine-war-impact-fla-real-estate?utm_campaign=3-16-2022+Florida+Realtors+News&utm_source=iPost&utm_medium=email

Posted in Market Updates
Feb. 27, 2022

How Russia’s Invasion of Ukraine Is Already Rippling Through the U.S. Housing Market

Russia’s deadly invasion of Ukraine has set much of the world on edge, with many fearing this could become the largest conflict since World War II. Russian airstrikes battering Ukrainian cities and bases have already roiled financial markets around the globe, rippling through the U.S. housing market.

Mortgage interest rates, which had been expected to keep inching up, instead retreated slightly, according to the latest Freddie Mac data. The stock and cryptocurrency markets, where many buyers pull money from to purchase property, tumbled. And ultimately, the already accelerated rate of inflation is expected to rise even further—hurting renters, buyers, and even builders who will continue to grapple with fast-rising construction costs.

“It’s all bad for the economy and housing. … It’s just a matter of how bad,” says Mark Zandi, chief economist at Moody’s Analytics. “There’s a number of different ways in which Russia’s actions will hurt housing.”

By just after 1:30 p.m. ET on Thursday, the S&P 500 was down more than 12.5% year to date, recovering a bit from the morning. Nearly half of that loss came in just the past five days as tensions escalated along the Ukrainian border. Stocks began rebounding Thursday afternoon after President Joe Biden announced more sanctions against Russia.

While that’s a substantial loss, it’s not a meltdown like what happened in the 2000s, when the markets lost more than 50% of their value.

“Investors tend to overreact to bad news and then settle down,” says Robert Dietz, chief economist of the National Association of Home Builders.

This may have a larger impact on the luxury real estate market, where wealthier buyers often cash out stocks or cryptocurrency to purchase multimillion-dollar homes or second or third abodes. However, the uncertainty may also make buyers in all price ranges hesitant to pull the trigger on large purchases such as real estate.

For now, the uncertainty in the stock market amid fears of a full-blown war in Europe is helping to keep mortgage rates in check.

Many investors moved into the bond market, which includes mortgage bonds, as they are generally considered safer, less volatile investments. Bond prices rose as a result. And when prices go up, mortgage rates typically fall.

Rates averaged 3.89% in the week ending Feb. 24, according to Freddie Mac. Instead of cracking 4%, rates dipped slightly from 3.92% in the previous week.

“We’d expected rising rates,” says Realtor.com Chief Economist Danielle Hale. Now “they’re more likely to steady, slip even.”

And if buyers aren’t worried that they have to purchase a home now before mortgage rates go up any further, it could relieve some of the urgency in the market. This could lessen demand in the short term, resulting in reduced competition among buyers.

“That would affect the market at all price points,” says Hale.

However, the jury is out on whether rates will stay lower. Moody’s Zandi believes they may rise as a result of the turmoil and ensuing inflation.

Another potential fallout for Americans is rising oil and gas prices, as Russia is the second-largest oil producer on Earth. While that is expected to affect prices at the pump and home heating costs, it’s also likely to make goods more expensive. That’s because food, products, and building supplies often require oil in their production. Then they need to be transported around the nation, or even the world, to wind up on store shelves.

“If oil prices go up, that raises costs throughout the economy,” says Hale. “It means more inflation.”

This could potentially lead to job losses, warns Zandi, if Americans pull back on their spending. He’s not expecting another recession, but he’s not ruling one out either.

There are also likely to be more global supply chain disruptions.

“That’s a real problem for homebuilders,” says Zandi. “They can’t build to meet demand because they can’t get the building materials and appliances and the things they need to complete homes.”

Inflation and supply chain problems are expected to lead to higher construction costs. Prices for building materials are already up 22% year over year, says Dietz. Lumber is up 40% in the past 13 months, while a popular kind of particle board used in construction rose about 60% over the same period. Those costs will be passed along to new homebuyers.

“We will continue to see that low double-digit growth in new homes prices as we move through 2022,” says Dietz. “It’s going to be a tough year for housing affordability.”

 

Source: https://www.realtor.com/news/trends/russias-invasion-of-ukraine-is-already-rippling-through-the-u-s-housing-market/?identityID=57addc8a838a2e411101ace0&MID=2022_0225_Weekly_NL&RID=4138076702&cid=eml_promo_Marketing_NonPRSL_WeeklyNL_cons.14196102_2022_0225_Weekly_NL-blog3russiaukraineconflict-blogs_trends

Feb. 25, 2022

Buying a Home in Another State? Here Are a Few Tips to Make the Process as Easy as Stress-Free as Possible

Posted in Home Buyer Tips, Moving
Feb. 24, 2022

Many First-Time Home Buyers Are Overlooking a Competitive Edge in 2022

Buying a house was challenging for many buyers in 2021, but especially for first-time buyers. Competition and prices were high, and inventory was low, and while some predictions suggest things will loosen up a bit in 2022, buyers will still need to have an aggressive strategy heading into the new year.

According to this REALTOR Magazine article, first-time buyers are optimistic about their chances in 2022, and many are changing their strategies to increase their odds of success.
The most notable changes in strategy were:

  • Making an offer within 48 hours of seeing a home
  • Offering above asking price
  • Being willing to compete in bidding wars
  • Going over their budget
  • Making offers on houses without even seeing them first

Making offers quickly, being willing to go above asking and compete in bidding wars are all advisable strategies in this market.

Going over budget on the other hand…well, that depends. If “going over budget” means still within their comfortable financial means, sure! If not, it’s a recipe for future struggle and financial trouble.

And making offers on houses without seeing them in person first isn’t the worst thing to do given technology, but it isn’t ideal.

What wasn’t on the list, and would likely make the biggest impact for first-time buyers, was to choose and work with a great real estate agent. Working with a trusted buyers’ agent can enhance any of the above strategies, if not make them unnecessary. Their awareness of the market, perspective, advice, connections, and negotiation skills can often give first-time buyers an edge, yet many first-time buyers don’t put a lot of emphasis on choosing and working with one.

So, if you’re a first-time buyer looking to edge out competition in 2022, by all means be prepared to do everything on the list other buyers are planning on. But, to truly tip the scales in your favor, make sure you’re teaming up with a buyers’ agent you connect well with and trust.

Posted in Home Buyer Tips