U.S. Offers Lower Prices for Luxury Real Estate

When looking at luxury real estate prices in the United States in comparison to luxury real estate prices in other nations across the globe, the United States offers some bargain options, according to recent research completed by Knight Frank, a global real estate consulting firm.  In fact, when Knight Frank ranked the top 5 percent of luxury real estate sales in 41 large international cities, Miami, Los Angeles, San Francisco and New York were the only U.S. cities on the list. 

Guangzhou, the capital of the southern province of Guangdong in China was at the top of the list, with luxury home prices dramatically increasing by 36.2 percent from March 2016 to March 2017, according to Knight Frank’s first-quarter Prime Global Cities Index.  The city with the second highest luxury real estate price increases was Beijing, where luxury home prices increased by 22.9 percent and Toronto, where luxury home prices increased by 22.2 percent.  The single-digit price increases in the United States are mild by comparison.  

“We’re seeing steady and sustainable luxury price growth in the key U.S. markets,” Says Kate Everett-Allen, head of international residential research at Knight Frank.  Miami, Florida led the list of U.S. cities with the highest luxury home price growth, ranking as number 14 on the overall list. Miami’s super high-end market was propelled by new condos in glass high-rises, which have finally been finished and put on the market.

Miami is not the only United States city bouncing back from the recession in a significant way with regard to the luxury home market.  The April Market Report released by the Naples Area Board of REALTORS® (NABOR®), which reports home listings and sales for all of Collier County (except Marco Island) indicates pending sales for homes in the $2 million and above price range increased by 41 percent.  Both March and April activity have had residential real estate professionals in the Southwest Florida area entering the summer months with a positive outlook.

Overall market statistics by price released by NABOR® indicate a 52 percent increase in pending sales for homes in the $2 million and higher price range, when comparing May 2016 to May 2017 and a 117 percent increase in closed sales for this price range, when comparing May 2016 to May 2017.  Meanwhile, the median closed price for the overall market in this price range for the Naples area decreased by 8 percent from May 2016 to May 2017.  Single family home market statistics by price for the Naples area show an 85 percent increase in pending sales for single family homes priced at the $2 million and over price range from May 2016 to May 2017 and a 78 percent increase in closed sales for this price range when comparing May 2016 to May 2017 closed sales numbers.  The median closed sales price for single family homes in this price range increased by 2 percent from May 2016 to May 2017.

Home Sales Forecasted to Top Last Year’s Totals

Lawrence Yun, Chief Economist of the National Association of REALTORS® (NAR) provided his 2017 midyear forecast and was joined by Jonathan Spader, Senior Research Associate at the Joint Center for Housing Studies at Harvard University, and Mark Calabria, Chief Economist and Assistant to Vice President Mike Pence, in presenting at the 2017 REALTORS® Legislative Meetings & Trade Expo. Discussions included the ongoing strength of the United States job market combined with an upward trend in consumer confidence, and how these factors are expected to contribute to a forecasted 3.5% increase in existing home sales for 2017. 

Yun discussed the challenges presented by low inventory and high prices in some metro areas, while Spader discussed the homeownership rate and Calabria discussed the importance of productivity and the labor force participation rate in encouraging the growth of the economy.

The first quarter of this year represents the best quarterly existing sales pace in ten years with 5.62 million sales.  Yun states that he expects activity to remain on this path and finish the year at approximately 5.64 million.  Yun’s projected 5.64 million in sales would represent the best since 2006 (6.47 million) and 3.5 percent above the total number of existing sales for 2016.  “The housing market has exceeded expectations ever since the election, despite depressed inventory and higher mortgage rates,” says Yun.  “The combination of the stock market being at record highs, 16 million new jobs created since 2010, pent-up household formation and rising consumer confidence are giving more households the assurance and ability to purchase a home,” adds Yun.

Despite the fact that the number of home sales for the U.S. is at a decade high, Yun expresses his belief that the strong labor market should be encouraging an even higher number of sales.  Yun says, “There’s little doubt first-time buyer participation would improve and the homeownership rate would rise if there was simply more inventory.” 

Yun foresees new housing construction to increase by 8.4 percent to 1.27 million for this year, but this is still not quite sufficient to make up for the low number of new homes build in the last few years.  New single-family home sales are estimated to total approximately 620,000 for 2017, an increase of 8.4 percent from 2016. 

“There was a lot of uncertainty at the start of the year, but a very strong first quarter sets the stage for a modest sales increase compared to last year,” said Yun. 

Buyers of Second Homes Focus on Investment

 

Investment home sales conquered the second home market in 2016, with a total of 1.14 million units sold for 2016, according to the recently released Investment and Home Buyers Survey results, compiled by the National Association of REALTORS^® (NAR).  However, the number of purchases of vacations homes decreased dramatically by 21.6 percent with a total 721,000 units for 2016.

NAR Chief Economist Lawrence Yun says, “In several markets in the South and West – the two most popular destinations for vacation home buyers – home prices have soared in recent years because substantial buyer demand from strong job growth continues to outstrip the supply of homes for sale.”  “With fewer bargain-priced properties to choose from and a growing number of traditional buyers, finding a home for vacation purposes became more difficult and less affordable last year,” Yun adds.

According to Yun, vacation home sales are now 36 percent below their 2014 peak.  The median price for vacation homes was $200,000, representing a 4.2 increase from 2015.  The portion of all-cash purchases in this sector dropped from 38 percent in 2015 to 28 percent. 

The median price for investment homes was $155,000 for 2016, representing an 8 percent increase from 2015.  The portion of all-cash purchases in this sector remained the same, at 19 percent, from 2015 to 2016.

“Sales to individual investors reached their highest level since 2012 (1.20 million) as investors took advantage of record low mortgage rates and recognized the sizeable demand for renting in their market as renters struggle to become homeowners,” says Yun.  “The ability to generate rental income or remodel a home to put back on a market with tight inventory is giving investors increased confidence in their ability to see strong returns in their home purchase.”

According to the survey, 42 percent of investors purchased a property with the goal of generating rental income, while 16 percent of investors purchased a home to hold onto for potential price increases.  Forty-two percent of those who purchased vacation homes did so in order to use the home for a “family retreat” or vacation property, while 18 percent of those who purchased a vacation home did so for retirement.  A large number of both investment home and vacation home purchasers said they rented the property short-term (less than 30 days).

Grants and Programs Available to Assist First-Time Homebuyers

The tasks involved in purchasing a home can be very overwhelming, particularly for first time homebuyers. In addition to all of the forms and disclusures involved, all of the expenses involved can add up quickly and become daunting.  On the plus side, there are many grants and programs available to assist first-time homebuyers with this process. 

Some of the options available nationwide include FHA loans available through the Federal Housing Administration (FHA), an agency that operates within the U.S. Department of Housing and Urban Development (HUD), which insures the mortgage and lenders receive a layer of protection that will protect them from experiencing a loss if the borrower ends up defaulting on the mortgage.  FHA loans typically offer competitive interest rates, a reduced down payment, and lower closing costs. Borrowers with a credit score of 580 or higher could be eligible for a mortgage with a down payment as low as 3.5 percent.

Also, USDA loans provide a homebuyer assistance program of the U.S. Department of Agriculture focuses on residences in certain rural areas. Through this program, the borrower does not need to purchase or run a farm to be eligible, the USDA guarantees the loan, there may be no down payment required, and the loan payments are fixed. USDA loan program applicants with a credit score of 620 or higher typically receive streamlined processing.

Other programs available include:

·      VA loans through the U.S. Department of Veterans Affairs and this program assists service members, veterans and surviving spouses in the process of purchasing a home.

·      Good Neighbor Next Door, which is sponsored by HUD and focuses on providing housing aid for law enforcement officers, firefighters, emergency medical technicians and teachers.

·      Fannie Mae or Freddie Mac have a program through which they work with local lenders to offer mortgage options that benefit low- and moderate-income families.

·      Energy Efficient Mortgage is a program that allows one to add improvements to their home that will make it more environmentally friendly. The federal government supports Energy Efficient Mortgage loans by insuring them through FHA or VA programs.

Conversations Regarding Sustainable Homes Increasingly Significant

 

Sustainable features in homes are becoming a more important topic of conversation among real estate professionals, builders, homebuyers and sellers. The National Association of REALTORS^® (NAR) recent REALTORS^® and Sustainability report reveals over fifty percent of REALTORS^® affirm that real estate buyers and sellers are interested in home sustainability issues and practices.

"As consumers' interest in sustainability grows, Realtors understand the necessity of promoting sustainability in their real estate practice, such as marketing energy efficiency in property listings to homebuyers," says NAR President William E. Brown. "The goal of the NAR Sustainability Program is to provide leadership and strategies on topics of sustainability to benefit members, consumers and communities."

To accommodate the increasing consumer interest, more Multiple Listing Services (MLSs) are including data entry fields to identify a property's green features; 43 percent of respondents report their MLS has green data fields, and only 19 percent do not. Real estate professionals see great value in promoting energy efficiency features within listings, with seven out of 10 stating that they feel strongly about the benefits in promoting those features to potential homebuyers.

The sustainability survey asked participants about renewable energy and how they view the impact of renewable energy on the real estate market. 80 percent of real estate agents and brokers said that solar panels are currently available in their market; forty-two percent said solar panels increased the property value.

The home features that survey respondents said clients consider as very or somewhat important include a home's efficient use of lighting (50 percent), a smart/connected home (40 percent), green community features such as bike lanes and green spaces (37 percent), landscaping for water conservation (32 percent), and renewable energy systems such as solar and geothermal (23 percent).

When it comes to the sustainable neighborhood features that clients favor, 60 percent of survey respondents listed parks and outdoor recreation, 37 percent listed access to local food and nine percent listed recycling.

As conversations regarding sustainability issues and practices become more and more common and features for homes further advance technologically and with regard to accessibility, it will be fascinating to see how this dialogue progresses between real estate professionals, homebuilders, homebuyers, and sellers in the future.

Heather Wightman Named a Southwest Florida Five Star Real Estate Agent

 

Five Star Professional partnered with Gulfshore Life magazine to identify real estate, mortgage and insurance professionals in the Southwest Florida area who deliver outstanding service and client satisfaction.  

Now entering its 15th year, Five Star Professional conducts in-depth, market-specific research in more than 45 markets across the United States and Canada to identify premium service professionals. 

Five Star Professional contacts thousands of recent homebuyers, along with real estate agents, to identify award candidates (nominees) and measure their client satisfaction levels based on the services they have provided. Phone, mail and online respondents rate their mortgage professional on criteria such as overall satisfaction and referability. Qualifying candidates are then evaluated on objective criteria such as experience, production levels and disciplinary and complaint history.  Professionals do not pay a fee to be considered or awarded.

The Five Star award is presented to local professionals who demonstrate outstanding service to their clients and only a small percentage of real estate professionals in the Southwest Florida area can be selected to receive the award.

This year’s Southwest Florida Five Star Real Estate Agent award winners have been announced in this month’s issue of Gulfshore Life, and Heather Wightman is among the winners!

Heather provides world-class service, which is clear through her clients’ loyalty.  With a solid foundation of knowledge and experience, Heather works to understand her clients’ needs and provides her assistance in helping each of her clients to reach their individual real estate goals.

Majority of Millennials Plan to Buy a Home in the Next Few Years

Over 80 percent of millennials in the United States who do not already own a home, plan to buy a home within the next five years, according to a recent HSBC Group research.

HSBC Group’s Beyond the Bricks, which is an independent consumer research survey of 9,000 in nine countries across the world, including 1,009 respondents within the United States, found that the dream of owning a home is very much still front and center for millennials around the world.

Millennials, who have credited slow wage growth and housing price inflation as obstacles in purchasing a home in the past, still see the goal of owning a home as an important personal aim.

The HSBC report also revealed that millennials have a need for better financial planning.  Among non-owners intending to buy a home in the next two years, 32 percent have no overall budget and 54 percent have only set an approximate budget.  More than half of millennials who bought a home within the last two years said they wound up spending beyond their initial budget. 

David Gates, U.S. Head of Mortgage Origination and Sales for HSBC, says, “This study highlights that young people strongly value homeownership, yet there are significant challenges to making the dream a reality for millennials around the world.  The perfect storm of stagnating salaries and rising house prices, paired with the need for improved financial planning can make buying a home a deferred reality.”

Close to three-quarters (71 percent) of millennials are saving more money for a deposit and waiting to earn a higher salary before purchasing a property, the report finds.

Millennials face some challenges when it comes to housing affordability, with a projected 1.9 percent increase in salary growth expected for 2017 and average property prices rising by 4.8 percent last year.

HSBC research pointed out four actions that millennials can take to help them in accomplishing their goal of owning a home:

·      Please early and consider the importance of having a deposit

·      Include extra costs beyond the purchase price within your budget

·      Consider sacrifices, such as spending less on leisure and going out, to help save more money and at a faster pace

·      Look at the big picture of your finances and shop for a home loan that best serves your needs.

Survey Points to Significant Increase in Florida Consumer Sentiment

Consumer sentiment among Florida residents increased in March to the highest level in 15 years, according to the most recent University of Florida (UF) consumer survey. 

University of Florida’s most recent consumer survey results indicate a consumer sentiment reading of 99, the highest rate since March 2002 and the second-highest rate since November 2000.  The lowest index possible is a 2, while the highest possible is 150.  All components that the index is based on showed an increase.

The current outlook that Floridians have regarding their financial situation increased from 88.1 to 88.5.  The perception of Floridians regarding whether it is a good time to buy a major household item such as an appliance increased from 99.7 to 103.5.  Hector H. Sandoval, Director of the Economic Analysis Program at University of Florida’s Bureau of Economic and Business Research says, “The increase in these two components shows that current economic conditions improved among Floridians in March.”  “In particular, women and those under age 60 displayed more optimistic perceptions.” 

The rating measuring what Floridians expect regarding the standing of their personal finances a year from now increased from 99.5 to 107.3 and participants’ viewpoints regarding the economic conditions of the United States over the next year increased from 92.0 to 99.2.  Participant viewpoints of the United States economic conditions over the next five years also increased from 89.5 to 96.7.

“Overall, Floridians are far more optimistic in March than the previous month.  The gain in March’s index came mainly from consumers’ future expectations about the economy.  Importantly, these views are shared by all Floridians, independent of their demographic characteristics and socioeconomic status,” says Sandoval.  “These expectations are particularly strong among women and those with an income under $50,000.”

Encouraging economic news has likely boosted consumer sentiment in Florida.  The labor market statewide continues to expand, with more jobs added on a monthly basis for over six years.  The unemployment rate in Florida remained at five percent in February.  According to the U.S. Bureau of Economic Analysis, Florida ranked third out of all states in the nation as far as personal income growth, with a rate of growth of 4.9 percent in personal income from 2015 to 2016. 

Increasing Fed Funds Rates Could Have a Positive Impact

Two weeks ago, the Federal Reserve announced a decision to raise the Fed funds rate by 25 basis points. Many housing analysts have expressed fear that this decision will increase mortgage rates, have a negative impact on home affordability, and possibly take the United States housing market recovery off its track. Rick Sharga, Executive Vice President of Ten-X and former Senior Vice President at RealtyTrac, disagrees. He thinks the rise in mortgage rates could in fact prove to be a good thing for the housing market.

Sharga and other industry analysts argue that this decision will cause buyers to move faster and get into the housing market sooner – before rates go any higher. Sharga says he expects this decision will help increase home sales in 2017 or, at the very minimum, encourage buyers who would have normally waited until later in the year to buy a home in the spring and summer months instead.

Sharga also expressed his belief that higher rates will encourage lenders to loosen some of the tight underwriting standards that have plagued the housing market the last few years and prevented many would-be borrowers from moving forward with a purchase.
"This will happen partly just due to higher mortgage interest rates, which will provide a bit of a cushion for lenders to take on a little more risk," Sharga writes in a recent column for housingwire.com. "And higher rates will also drastically reduce the number of refinance loans being issued, which lenders will try to offset by doing more purchase loans."

Sharga thinks the Fed's recent 25-basis-point hike may not actually have a big an impact on mortgage rates.

"The 25-basis-point hike was well within the range that most industry analysts had expected, which means it's possible that this hike won't cause mortgage rates to rise significantly from current levels, which are already the highest they've been in years," Sharga notes.

If Sharga expectations come to fruition, this could equal a scenario with motivated buyers, more relaxed lending standards, minimal mortgage rate increases, and strong wage and job growth, which could result in the strongest spring selling season in several years.

New Scam Targeted at Real Estate Industry

Wire fraud schemes targeted toward those involved in real estate transactions have been a commonly discussed topic for some time, but there is now a new type of scam that is surfacing that is almost impossible to prevent, and at least 4,000 agents from all 50 states and Canada have already been impacted.

A real estate professional from Dubuque, Iowa says scammers are using her identity to create fake email addresses in her name and send fraudulent emails offering referrals to other real estate agents. The emails also contain fake contact information. Recipients who responded have been sent a Google Drive link that they are told contains listings the referred client wants to see. However, the link, once opened, installs computer viruses that allow scammers to scrape passwords and other personal information from the targets computer.

The initial fraudulent email typically reads as the below example:

"Hi,

My name is (Realtor’s Name) a realtor with (Real Estate Company Name) in Dubuque IA, I have a client who is interested in buying a property in your area of expert, Please let me know if you're available to help them out and I will send their contact details and the listings they are interested in.

Best

Realtor’s Name"

People who receive the email are encouraged to report it as spam or a phishing attempt. The hope is that if enough people take such action, the IP address of the sender will be blocked.

Since February 2016, when the scam apparently started, nearly 4,000 practitioners have contacted Dietz to either confirm the referral or warn her of the scam.

"I've gotten calls at the office, on my cell phone, texts and emails at all hours of the day and night," the real estate professional whose name is being used for the scam says. "There was one day I had over 100 pieces of correspondence just about these emails."

"Unfortunately, it is nearly impossible on the front end to prevent a fraudster from using your name in a scam," says Jessica Edgerton, associate counsel for the National Association of Realtors. "If you are the victim of any kind of identity theft, the best course of action is to immediately contact the Federal Trade Commission (FTC), the FBI and your local authorities."

Edgerton says that recipients of suspicious emails that appear to come from another real estate professional should search that practitioner's name on Google to compare their business email address and contact information to that of the sender.

If you want to keep your email more secure, Edgerton offers the following tips:

• Check sent mail, junk mail and email account settings regularly for anomalies. Hackers often break into an email account and modify the "email forwarding" settings to forward emails to their own account.
• Regularly purge email of unneeded or outdated information. Save important emails securely.
• Avoid email as a method for sending sensitive or confidential information. Instead, consider using a secure document sharing or transaction management platform.
• Use strong passwords that incorporate a combination of letters, numbers and symbols.
• Use two-factor (or multi-factor) authentication.
• Avoid using unsecured or public Wi-Fi.

Prime Time to Put a Home on the Market

Many factors can have an effect on the sale of a home, including the timing of when the home is listed.  According to a recent evaluation by Zillow, the best time of the year to list a home for sale in the United States is between May 1 and May 15.  The analysis results show that homes listed during this period of time typcially sell for a higher price and at a faster pace (9 days faster than the average for the nation overall). 

The May 1 through May 15 timeframe is the best overall time frame to list a home for sale in the United States, though this window of time varies for some metro areas.  For example, the ideal time frame for homes to be listed for sale in San Francisco, California is May 16 – 31; the ideal time for Miami-Fort Lauderdale and Tampa, Florida is March 1 – 15; and the ideal time for homes to be listed for sale in Baltimore, Maryland is April 1 – 15, during which homes for sale tend to sell approximately 21.5 days faster than average.

Zillow’s analysis also indicates that there are ideal days of the week for the initial listing of a home for sale.  Homes new to Zillow on Saturdays are generally viewed 20 percent more during their first week on the market than homes that are listed on Zillow earlier in the week. 

“With 3 percent fewer homes on the market than last year, 2017 is shaping up to be another competitive buying season,” says Dr. Svenja Gudell, Chief Economist at Zillow.  “Many homebuyers who started looking for homes in the early spring will still be searching for their dream home months later. By May, some buyers may be anxious to get settled into a new home – and will be more willing to pay a premium to close the deal,” Gudell adds.

These are some important factors to take into consideration for homeowners looking to list their home for sale, but also for buyers and residential real estate industry professionals across the nation. 

Reasons Why Families Choose Naples, Florida

Naples, Florida is widely known for its beautiful white sand beaches and its warm climate, yet there are a plethora of additional benefits to living in the area and families who already live in Naples or are looking to move there are more than aware. Some of the key benefits to living in Southwest Florida’s Naples include safety, dining, cleanliness, outdoor activities, architecture, year-round events, good schools, and employment opportunities.

The crime rate in Naples, Florida sits far below the national average. Reports indicate the crime rate in Naples is also approximately 86 percent lower than the Florida state average. The police officer to resident ratio is high as well, which helps to keep the crime rate low.

Some of the best dining options in the nation are located in Naples. Favorites include Osteria Tulia, The Grill at Ritz Carlton, Truluck’s and the Turtle Club.

When it comes to the cleanliness of Naples, the word pristine comes to mind. Litter-free roads, smaller signs, clean beaches, and meticulously landscaping all contribute to the overall beauty in this slice of paradise.

There is an abundance of outdoor adventure possibilities in Naples, including golfing, boating, fishing, snorkeling, parasailing, paddle boarding, and more. The warm and sunny weather draws people to enjoy the outdoors. And for those who want to enjoy a little bit of relaxation in the sun, the beaches are stunning from sunrise to sunset, with Naples offering some of the most vibrant, awe-inspiring and colorful sunsets.

Year-round events are also hosted in Naples, drawing residents to go out and about and drawing visitors to the area. Music and art festivals, a yearly seafood festival, craft beer festival and musical performances catering to those who follow all genres fill the area throughout all months of the year.

In addition to all of the above, Third Street South and Fifth Avenue South districts offer boutiques, various specialty shops and outdoor cafes, offering a multitude of shopping and dining options as well as dancing and other nightlife.

Naples was reported to be the happiest and healthiest city in the United States, according to Gallup-Healthways Well-Being Index in 2016, and it is easy to see why.

Welcome Readers

I am a 4th generation native Floridian and has lived in Naples since 1977. Growing up in the area has afforded me a deep, intimate knowledge of Southwest Florida and everything it has to offer to residents and visitors – especially in the residential real estate market.

I have been a licensed REALTOR® since 1993. I've bought and sold residential real estate all over Southwest Florida from Marco Island to Cape Coral, and everywhere in between. My focus is concentrated on vacation and second homes, investment homes for the golf enthusiast, and those desiring the waterfront lifestyle. I specializes in resales, renovations, pre-construction and new construction homes.

I attended the University of South Florida with studies in Business and hold a Bachelor of Science Degree in Business Administration from Hodges University.

When I'm not serving clients, I take advantage of Southwest Florida’s world-class dining and shopping, and is an avid boater as well. Additionally, I am very active in the community, attending and organizing social activities for many local causes.

I've been married to my husband, Rich, for over 23 years and have two sons who attend local schools.