Sellers Adjusting Pricing to Market Value in Southwest Florida Real Estate Market

The single-family housing market in Southwest Florida has continued to see sellers modifying their pricing to match current market value. These modifications to pricing to current market value have resulted in a decrease of the average median home prices in Southwest Florida and have helped to increase pending sales activity. This practice amongst home sellers in Southwest Florida is projected to continue and is expected to continue to boost sales activity in the area as we move forward through the remainder of 2017.

In contrast, the condominium market in Southwest Florida is still showing many units priced high and in need of price adjustments. This has had an impact on the average days on the market for condominium homes. As summer approaches and seasonal buyers are expected to return to the area for the summer selling season, condominium homeowners are anticipated to make the price adjustments necessary to attract buyers who are looking for properties listed at fair market value versus overpriced units.

Housing market reports indicate the number of overall closed sales in the Bonita Springs-Estero area within Southwest Florida, including single-family homes and condos, increased to 2,989 units for the 12-month period ending in April 2017. This is compared to 2,965 units for the 12-month period ending in April 2016. Pending sales for April 2017 were at a 7 percent increase with 3,098 units when compared to 2,902 units in April 2016. Activity narrowed slightly for the Naples area, when compared to the strong end to the first quarter of 2017, as pending sales for the 12-months ending in April 2017 showed a 3 percent decrease. Closed sales showed a 4 percent decrease and inventory, in contrast, showed an 8 percent increase. Again, continued price adjustments and the beginning of the summer selling season are expected to boost the housing market in Southwest Florida in the coming months, offering a positive outlook for the area’s residential real estate market.

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).

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.

Hispanic Homeownership Influence Exceeds National Statistics

Hispanics have a strong influence in homeownership, exceeding national statistics as they purchase homes at an increased rate for the second consecutive year. 

According to the National Association of Hispanic Real Estate Professionals’ (NAHREP) recently released 2016 State of Hispanic Homeownership Report, the Hispanic homeownership rate increased to 46 percent last year, in spite of a decreasing overall rate of homeownership across the nation.  The Hispanic homeownership rate was 45.6 percent for 2015 and 45.4 percent in 2014.  Over 7.3 million Hispanic households owned their homes in 2016, with 330,000 new households added – 38 percent of all households formed.

The drivers that are compelling Hispanics to purchase a home are the pursuit of the American Dream and the fact that the majority of Hispanics view homeownership as a viable investment vehicle for building wealth, as well as the ideal for raising children. “The significance of a strong desire for homeownership cannot be overstated,” the report states.  “Where there is a will, there is generally a way.” 

More members of the real estate industry are also working to meet the unique needs of Hispanic homebuyers, particularly in terms of obtaining financing.  “While the Hispanic market has outgrown the ‘niche’ segment designation, the housing industry is just beginning to fully recognize its significance to the vitality of the overall market and is responding with products and services that are more relevant to the needs of Hispanic consumers,” states the report, citing recent initiatives spear-headed by Bank of America, Fannie Mae and Freddie Mac, and Wells Fargo. 

Some hurdles to Hispanic homeownership, such as financing and a lack of knowledge regarding Hispanic cultural norms amongst members of the housing industry, still exist.  “Hispanics tend to reside in a multigenerational household of a typical nuclear family and include additional family members like grandparents or other adult relatives, all of whom contribute to household expenses,” the report states.  “These influencing factors are interconnected with their culture and affect how they bank…Access to culturally competent real estate and mortgage professionals who speak Spanish and can recommend appropriate solutions to meet their needs creates a level playing field.”

For real estate professionals, Hispanics signify a sustainable and massive opportunity.  Ninety percent of Hispanics favor owning a home over renting one in the future, and 62 percent are more likely to purchase a home than rent one upon their next move.  In 2016, Hispanics had a purchasing power of $1.4 trillion – a number that will continue to grow as incomes and Hispanic-owned businesses increase and expand.