A couple of reasons that we are not heading for a housing bubble

Here are some best reasons that we are not heading toward a housing bubble:

  • Foreclosure rates are down.  A major cause of the housing crash last decade was the number of foreclosures that hit the market.  According to  ATTOM Data Resources, there were reported on 676,535 U.S. properties in 2017, down 27 percent from 2016 and down 76 percent from a peak of nearly 2.9 million in 2010 to the lowest level since 2005.  Those 676,535 properties with foreclosure filings in 2017 represented 0.51 percent of all U.S. housing units, down from 0.70 percent in 2016 and down from a peak of 2.23 percent in 2010 to the lowest level since 2005.

Foreclosures

  • Mortgage standards have increased since the the last bubble.  Originating a loan has become more time consuming because of the process of collecting volumes of information and documentation from borrowers and verifying everything to make sure the loan file is accurate. Lenders can pay big fines for originating faulty loans like they did during the bubble era. Now,  lenders they are checking everything.  However, this comes at a cost that is pasted on the home owners.  Access to mortgage credit remains tight and making it too difficult for responsible borrowers to get loans. Before the housing crisis, lenders were making loans to people who couldn’t afford a mortgage. But now the opposite problem exists in the other direction. Mortgages today have default rates as low as you can possibly get.  The following chart shows the histroical default risk associated with home mortgages:

Mortgage Default Rates

In the Real Estate Market?

KW1784102f20KW.jpgYou should consider using a realtor.  I could save you money especially with new home builders and it does not cost you anything.  So why not? Let me save you money!!!  If you are interested in buying real estate (new home, existing home, or commercial property), please contact me (Alan Lane with Signature Realty Associates at 2234 Lithia Center Lane, Valrico, Florida).  As a life long resident of Central Florida, I can help you find the right property for you whether it is in Orlando or as far south as Sarasota.  My email address is alanlane66@gmail.com, or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for real estate opportunities on my website at this link

 

 

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Tampa Bay Single Family Market Update August 2018

We have presented an overview of the national, state and Tampa Bay County Residential market.

National and Regional Single Family Market

According to NAR, existing single family homes sales have decreased with projected annual sales of 5,380,000 units in June 2018 annually versus 5,500,000 units in November 2016.  Statistics in the South have increased slightly with annual sales in June 2018 of 2,250,000 versus 2,240,000 in June 2017.

National Existing Home Sales

As of June 2018, there was a 4.3 month supply of inventory available, which was up 2.4% from the previous year, nationwide.

National Sales Price

Meanwhile, the median nationwide existing single family home price was $276,900 in June 2018, which is up 5.2% from a year ago.  The median price in the South was $237,500, which was up 2.7% from the previous year.

The average nationwide existing single family home price was $314,900 in June 2018, reflecting a 3.8% increase from a year ago.  The average price in the South was $276,100, which is up 2.1% from the previous year.

Florida Single Family Market

The following data was prepared by the Florida Association of Realtors (FAR).

As can be seen in the following charts, sales of single family homes at its height (in recent years) increased in the second quarter of 2017, compared with second quarter of 2016 numbers.  Sales in Second Quarter 2017 were 79,888 compared to 77,023 in Second Quarter 2016.  This represents a 3.7% increase. Recently, sales of single family homes have decreased slightly to 60,204, but remain higher than the First Quarter of 2016 (57,779) and First Quarter of 2015 (57,676), and slightly lower than the First Quarter of 2017 (60,733).

Florida Closed Sales

STATE OF FLORIDA HISTORICAL CLOSED SALES FIGURES

Closed Sales Figures

Although there was a slight decrease in the number of sales, pricing has increased in First Quarter of 2018 to $248,000, up 9.7% from the same time period in 2017 at $227,000.

STATE OF FLORIDA MEDIAN SALES PRICE FIGURES

Florida Median Sales Price

Fl Median Sapes Price Chart

Tampa Bay Single Family Market

The following data from the Tampa-St. Petersburg-Clearwater MSA (includes Hernando, Pasco, Pinellas and Hillsborough Counties) was prepared by the Florida Association of Realtors (FAR).  As can be seen in the following charts, sales of single family homes have generally remained stable in 2016 over 2015 to a high in the Second Quarter of 2017.

TAMPA AREA CLOSED SALES FIGURESTampa CLosed Sales

Pricing of homes has stabilized with a median sales price in the First Quarter of 2018 of $225,000, representing an 8.4% increase from First Quarter of 2017 of $207,500.

Median Sales Price TAMPA AREA MEDIAN SALES PRICE FIGURES

Tampa Median Sales Price

CONCLUSION

The Tampa Bay MSA area experienced large growth in residential housing during the residential “boom” period of the early to mid 2000’s. Since the beginning of 2013, the market has shown increases in both pricing and sales figures.  These figures continue to show improvement.

In the Real Estate Market?

KW1784102f20KW.jpgYou should consider using a realtor.  I could save you money especially with new home builders and it does not cost you anything.  So why not? Let me save you money!!!  If you are interested in buying real estate (new home, existing home, or commercial property), please contact me (Alan Lane with Signature Realty Associates at 2234 Lithia Center Lane, Valrico, Florida).  As a life long resident of Central Florida, I can help you find the right property for you whether it is in Orlando or as far south as Sarasota.  My email address is alanlane66@gmail.com, or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for real estate opportunities on my website at this link

Today’s Golf Course Industry

The primary data source used to form my opinions was National Golf Foundation publications. In most cases, this information is quoted verbatim.  There are three generally accepted traditional categories of golf courses; municipal, daily fee, and private courses.

 NATIONAL MARKET TRENDS

The golf course industry continued to undergo a slow and steady cycle of self-balancing in 2017. This right-sizing in the supply of United States golf facilities is the ongoing byproduct of an unsustainable period of growth (1986-2005) in the world’s best-supplied market.

At the end of 2017, there were a total of 14,794 golf facilities in the U.S. The net reduction represents a 1.5% contraction of the U.S. golf facility supply from 2016. Demand for land to develop residential and commercial real estate continues to fuel the supply correction in golf. For golfers, the quality of supply continues to gradually improve as some courses close and many remaining ones undertake improvements, both major and minor.

GOLF COURSE FACILITIES

Golf Course Facilities

SOURCE: NGF

In addition to the lower openings of golf courses, recently there has been a trend of courses closing nationwide.  As can be seen in the above chart, this has caused the net growth of courses to be negative.  Since 2006, the cumulative reduction in the total number of U.S. golf courses is 6.9%. By comparison, there was a 44% increase in the number of courses over a two-decade course building boom from 1986-2005.

Golf Course Renovations

Renovation, not new construction, is the largest source of U.S. golf course development activity. Approximately 1,100 course renovations over the past decade represent a total investment of at least $3.25 billion. That doesn’t factor in minor rehabilitation projects. The new courses that are being built demonstrate an increased focus on being playable and enjoyable.

PARTICIPATION

 This statistic shows the number of participants in golf in the United States from 2006 to 2016. In 2016, the number of participants (aged six years and older) in golf amounted to approximately 23.82 million.  The US golfer base saw a boom from the late 1990’s and early 2000’s where the golfer base climbed to nearly 30 million.  This does not bode well for the golf industry as core golfers account for the most rounds played at most courses.

Number of participants in golf in the United States from 2006 to 2016 (in millions)

Golf Course Participants

ROUNDS PLAYED

The average active golfer from this data set plays 16.4 rounds per year. Notice that we say “Active Golfer” and this might not represent the average golfer. Florida is on top of the chart as expected with 25.1 rounds per year. Golfers in Colorado play the least in our top 20, with the average golfer playing just 14.4 rounds per year.

Golf Rounds Played

Accessibility and Affordability

With 75% of facilities open to all players, it matches the highest public-to-private ratio in history. The municipal facility count hit 2,497 in 2017, an all-time high for the industry. The average price paid for an 18-hole round is $34 (Public peak season, weekend greens fee with cart, adjusted for discounts (weekdays, twilight, walking, senior, etc.)). The average price for a 9-hole round is $19.

Golf Facility Operations

The U.S. golf industry’s 15,014 regulation golf facilities generated $33.286 billion in operating revenue in 2016, up from $28.945 billion in 2011, representing a compound annual growth rate of 2.8%.  The total number of golf facilities declined during this period (down by 737 facilities, or 4.7%, from 2011), however average revenue for the remaining facilities grew as the U.S. economy recovered from the major economic downturn that ended in 2010.  Lower unemployment and stronger growth in consumer spending and tourism supported golf facility operations in 2016, as did the absence of extreme weather across most of the country.

Average Prices Paid for Golf Courses

With the majority of golf course transactions being in the $1 to $3 million dollar range, nationally, there has been an influx of first-time golf course buyers entering the golf course market.  According to sales data compiled by Marcus & Millichap, the following trends in golf course prices since 2006:

Golf Course Sales

According to Marcus and Millichap, profitable deals where sellers are seeking a 10% cap rate (10X EBITDA) still need to show incredible upside to trade at that price in terms of revenue growth. However, the better located courses with quality course conditioning and high levels of customer service (including leagues and events) will continue to provide owners with solid returns.

SUMMARY

Although a golf course closes every 48 hours in the United States based on statistics from the NGF, there has been an increase interest in renovations of existing golf courses. The compression of golf facilities since 2006 of about 6% compares with growth of 44% from 1986 to 2005. Rounds played nationally were up in 2014, 2015 and 2016, and that the reduction in supply is not impacting demand.

In the Real Estate Market?

KW1784102f20KW.jpgYou should consider using a realtor.  I could save you money especially with new home builders and it does not cost you anything.  So why not? Let me save you money!!!  If you are interested in buying real estate (new home, existing home, or commercial property), please contact me (Alan Lane with Signature Realty Associates at 2234 Lithia Center Lane, Valrico, Florida).  As a life long resident of Central Florida, I can help you find the right property for you whether it is in Orlando or as far south as Sarasota.  My email address is alanlane66@gmail.com, or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for real estate opportunities on my website at this link

Sunset Pointe at Collany Key

 

An established luxury residential condominium development known as “Sunset Pointe at Collany Key” has units available in its third phase in Tierra Verde, Florida.  This development is located in southern tip of Pinellas County, which is one of the most populated counties in Florida and part of Tampa Bay community.  These units provide spectacular natural views coupled with a premier amenity package.  The Phase 3 building will contain 30 luxury, three bedroom, three and one half luxury residential units ranging in size from 2,721 to 2,939 square feet of living area with large front and rear balconies as well as garages on the first level.  Although the top units provided unparalleled panoramic views of the Gulf of Mexico, the second floor units will feature oversized balconies with private stairs and dramatic water front views.  The community amenities package includes a waterfront resort style heated pool and spa, fitness room, outdoor kitchen and meeting area, sunset pavilion, and nature trail.  The prices sill start at $1,265,250.  If you are interested, please feel free to contact me. 

In the Real Estate Market?

KW1784102f20KW.jpgYou should consider using a realtor.  I could save you money especially with new home builders and it does not cost you anything.  So why not? Let me save you money!!!  If you are interested in buying real estate (new home, existing home, or commercial property), please contact me (Alan Lane with Signature Realty Associates at 2234 Lithia Center Lane, Valrico, Florida).  As a life long resident of Central Florida, I can help you find the right property for you whether it is in Orlando or as far south as Sarasota.  My email address is alanlane66@gmail.com, or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for real estate opportunities on my website at this link

Tampa Bay Residential Condominium Market

I have presented an overview of the national, state and Pinellas County residential market.  I have relied on statistics provided by NAR (National Association of Realtors), FAR (Florida Association of Realtors), and GTAR (Greater Tampa Area of Realtors).

National and Regional Condominium Market

According to NAR, existing Condominium sales have decreased slightly with projected annual sales of 620,000 units in May 2018 versus 640,000 units in May 2017.  Statistics in the South have increased slightly with annual sales in May 2018 of 290,000 versus 271,000 in May 2017.As of May 2018 there was a 3.9 month supply of inventory available, which was down from a 4.2 month supply of inventory available from the previous year, nationwide.

NAR Existing Condo

As illustrated on the following table, the median nationwide existing condominium price was $244,100 in May 2018, which is up 2.5% from a year ago.  The median price in the South was $189,300, which was down 1.0% from the previous year.

The average nationwide existing condominium price was $292,400 in May 2018, reflecting a 2.6% increase from a year ago.  The average price in the South was down 1.3% from the previous year.

NAR Sales Price Of Existing Condo

Florida Condominium Market

The following data was prepared by the Florida Association of Realtors (FAR).As can be seen in the following charts, sales of condominium units increased by 2.8% in 2018, compared with 2017 numbers.  Sales volumes have increased each of the past five years. In the First quarter of 2018, there were 27,088 sales, an increase of 2.8% over the First Quarter of 2017 figures.

FAR CLOSED SALES CHART

FAR Median Sales Price

STATE OF FLORIDA HISTORICAL CLOSED SALES FIGURES

FAR CLOSED SALES CHART

Along with increases in the number of sales, both the median and average sales pricing has also increased in 2018, up 7.8% and 10.4% from 2017 figures.  Both the median and average sales pricing in Florida has continued to increase during the first quarter of 2018.

STATE OF FLORIDA HISTORICAL AVERAGE SALES PRICE FIGURES

FAR Average Sales Price

Tampa Bay Condominium Market           

The following data was prepared by the Greater Tampa Association of Realtors (GTAR).  As can be seen in the following charts, sales of condominium units decreased in the first quarter of 2018 over the first quarter of 2017.

Tampa Bay Condo Market Closed Sales

TAMPA AREA CLOSED SALES FIGURES

Tampa Area Closed Sales Figures

Home pricing has continued to increase, with a median sales price in the First Quarter of 2018 at $154,000, representing a 10.0% increase from First Quarter of 2017.

TAMPA AREA MEDIAN SALES PRICE FIGURES

Tampa area median sales price figures

CONCLUSION

The Tampa Bay MSA area experienced large growth in residential housing in recent years. Since the beginning of 2015, the market has shown increases in both pricing and sales figures.  Pinellas County is slowly becoming more built out with less vacant land available for development. Based upon the previous data, 2018 appears to be showing significant improvement over 2017 in terms of pricing and sales

In the Real Estate Market?

KW1784102f20KW.jpgYou should consider using a realtor.  I could save you money especially with new home builders and it does not cost you anything.  So why not? Let me save you money!!!  If you are interested in buying real estate (new home, existing home, or commercial property), please contact me (Alan Lane with Signature Realty Associates at 2234 Lithia Center Lane, Valrico, Florida).  As a life long resident of Central Florida, I can help you find the right property for you whether it is in Orlando or as far south as Sarasota.  My email address is alanlane66@gmail.com, or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for real estate opportunities on my website at this link

Trump Tax Reform and Real Estate Investments

Mortgage Interest Deduction

money-7Mortgage interest is now only deductible on the first $750,000 of acquisition debt on primary and secondary residences. However, there is a grandfather clause that allows all previously purchased residences to continue deducting their interest on up to $1,000,000 of debt.

Interest on home equity debt is no longer deductible, unless the proceeds are used to improve rentals. Home equity debt includes refinances on your primary or secondary residences as well as HELOCs.

moneyhands_217w_gifAccording to the Pew Charitable Trusts, only about a fifth of American tax filers (21.5%) claimed the mortgage interest deduction, netting an average $8,612 in tax deductions in 2015.  According to real estate information firm Attom Data Solutions, only about 5.4% of all of the mortgages made this year were for more than $500,000. Thus, the impact is not as significant as you would think it would be.

The biggest winners will be the middle class which live in a moderately priced homes.  The biggest losers are going to be high priced homes with jumbo loans in excess of $750,000. 

Standard Deduction

The standard deduction will now be $12,000 for those filing single, and $24,000 for those who are married and filing joint. Personal exemptions have been eliminated.

AMT (Alternative Minimum Tax)

img_6055The AMT’s exemption amounts increased to $109,400 for married filing joint and $70,300 for all other taxpayers. Additionally, the phase out thresholds are increased to $1,000,000 for married taxpayers filing a joint return, and $500,000 for all other taxpayers (excluding estates and trusts). These amounts are indexed for inflation.

Depreciation

The new law increases bonus depreciation from 50% to 100% for assets with useful lives of less than 20 years. For example, If you purchase personal property (carpet, appliances, tools, equipment, etc.) or if you make land improvements (landscaping, driveways, parking, etc.), you can now immediately write off the entire cost of these assets.  However, you cannot write off the cost of buying a rental property and the property’s key components because they have useful lives of 27.5 years.

It is important to note that this is bonus depreciation. That means that when you sell the assets, you will pay depreciation recapture tax. Keep that in mind.  Bonus depreciation is retroactive to start in September 2017. So if you are making any year-end purchases/improvements, they will be 100% written off.

Lifetime Gift Exclusion

IMG_8520Every year, you are allowed to gift another person $14,000 without having to fill out a gift-tax form. If you gift any one person over $14,000, you must fill out a gift tax form that then reduces your lifetime gift exclusion.  That lifetime exclusion has been increased to $10,000,000 and will be indexed for inflation. This is on a per-person basis and will reduce the number of estates subject to federal estate taxes.

Section 121 Exclusion

This is commonly referred to as the $250,000 ($500,000 if married) exclusion on gain from the sale of a qualified residence. In order to claim the exclusion, you must have lived in the property for the past two of five years.

In the Real Estate Market?

KW1784102f20KW.jpgYou should consider using a realtor.  I could save you money especially with new home builders and it does not cost you anything.  So why not? Let me save you money!!!  If you are interested in buying real estate (new home, existing home, or commercial property), please contact me (Alan Lane with Signature Realty Associates at 2234 Lithia Center Lane, Valrico, Florida).  As a life long resident of Central Florida, I can help you find the right property for you whether it is in Orlando or as far south as Sarasota.  My email address is alanlane66@gmail.com, or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for real estate opportunities on my website at this link

Luxury Residential Condominium on World Famous Daytona Beach

Condo FrontBeach NorthJUST LISTED at $525,000 – This high rise condominium unit has a breathtaking view of the Atlantic Ocean on Daytona Beach Shores. Built in 1990, this 1,826 SF condminium unit is designed to maximize the views of the water from the 19th floor balcony. Do not miss this opportunity to own this highly desired Ashley Condominium unit. Although it is not the penthouse, you feel like you are on top of the world. The property features three bedrooms and three baths, and an open floor plan. Stunning ocean front views from master suite and guest bedroom, spacious walk in closet, double sinks, and garden tub. Large balcony with north views of Sunglow pier and the Atlantic Ocean. The amenities include a gym, two saunas, spa, heated outdoor community pool overlooking the ocean, with parking garage as well as onsite management! Come enjoy your ocean front living! This property can also be leased when you are not there.

In the Real Estate Market?

KW1784102f20KW.jpgYou should consider using a realtor.  I could save you money especially with new home builders and it does not cost you anything.  So why not? Let me save you money!!!  If you are interested in buying real estate (new home, existing home, or commercial property), please contact me (Alan Lane with Signature Realty Associates at 2234 Lithia Center Lane, Valrico, Florida).  As a life long resident of Central Florida, I can help you find the right property for you whether it is in Orlando or as far south as Sarasota.  My email address is alanlane66@gmail.com, or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for real estate opportunities on my website at this link