Wednesday, February 3, 2016

Real Estate and Housing Predictions for 2016

SI Real Estate Tampa Bay is excited to see what 2016 has in store for the housing market.

We were pleasantly surprised with the uptick in real estate activity in 2015. Of course everyone is turning the page to the New Year, and consumers are contemplating what to expect in the housing market. The professionals here at SI Real Estate fully believe this year will be an even better one, eclipsing the fantastic turn-around last year that took place throughout the US. Some of the key reasons for this that we are going to talk about: interest rates/lending, inventory, and pricing.
Interest rates have been historically low since the recession began. They are still extremely attractive, even with the negligible increase last month. Yes there should be at least a couple more increases in 2016, but they will likely be small bumps like the quarter point increase in December. This is not expected to affect the attitude of home buyers and will actually help strengthen the economy. Lending benchmarks became stricter after the housing market burst, but they are finally relaxing a tad (as we feel they should). The high benchmarks that needed to be met effectively ruled out a ton of potential home-owners due to blemishes, mostly stemming from the economic crash. Credit scores that were below the extremely high standards of lenders was another issue that plagued parties trying to buy real estate. Luckily, Fannie Mae and Freddie Mac have been working to lower their acceptable threshold for credit scores, though they are still historically high overall.
Available inventory has been thin for the past 400+ days here locally in Tampa, with many major cities echoing the same trends. This is for both new home sales and resale homes. Prices have been trending up due to the low inventory we are seeing. Now that home values have risen to a comfortable level, more listings are coming into the market place as sellers can take advantage. Here in Tampa, there is still only a 4 month supply of homes available, well below the 6 month target for the housing market. We expect low inventory numbers to remain through the first half of this year, as more buyers come to look for Florida properties to purchase.
Housing prices are up across the board including new homes, resales, and rental prices. Builders have been steadily raising their prices over the last 12 plus months. We have seen new pricing sheets released by some builders for 2016, all of which reflect increases. This trend makes a lot of sense considering the inventory shortages and the surge of new home sales locally and nationally. Home builders see this as an opportunity to increase profits, as they should.  Our professional experiences in the industry reflects price increases in every sector of the market.  Sellers can expect a higher price point for their homes and are not in a hurry to take the first offer they receive. Buyers are willing and able to pay more for a home than in years past. Investors are paying more this year for assets they could have picked up for significantly less in 2012-2014. Since investors are having to pay more for properties they turn around and rent, they have been raising rent prices accordingly. Pricing trends are not artificially high and we expect continued growth throughout 2016.
As we all recognize, the housing market has recovered and the number of potential buyers and sellers participating is rising every day. The MLS is populated with new listings and transactions, which is fantastic to see. Although inventory is lower than we would like, and prices are rising… the market is very attractive for any type of participant. Projection: Real estate expectations will result in a stellar year nationally and in the Tampa Bay area as there is notable momentum carrying through from 2015! 6 real estate economists from inman.com agree with our prediction too. Their latest article published 2/2/2016 echoes the same sentiments that we do- 2016 will be another great year for the housing market! If you want to read their article and predictions, go here: http://www.inman.com/2016/02/02/6-economists-forecast-2016-housing-market/
-SI Real Estate Tampa Bay

Thursday, December 31, 2015

Real Estate Pulse: Recapping 5 years!

Real Estate Pulse:  Recapping 5 years!
Active Housing Market keeps persuading buyers and now sellers

The last 5 years of the real estate market has been a wild ride to say the least. In 2010, first time home buyers increased dramatically over the norm due to the large tax credit given out by the federal government.  That triggered the highest number of first time buyers ever. While this group accounted for half of the homes purchased in 2010, the other key players were the international (cash) investors who were purchasing the rock-bottom-priced inventory. This same group of investors and first time home buyers were the main consumers of real estate through 2012.  By this time, the excess inventory had been purchased one way or another.     
In 2013, values of homes were finally catching up and or exceeding the mortgage pay off(s).  Finally sellers and their listings began trickling into the market. This segment of the housing market was previously stagnant and was on the side lines for many years. Finally they can list and sell their homes for a value that exceeded the mortgage, or at least minimally met the mortgage value, depending on when they actually bought their homes. It was a hot year.  Sellers, buyers and builders were moving along. There was so much pent up demand for real estate, homes and people had frugal fatigue.  
In 2014 during the second year of the housing recovery… there was a shift. Only 33% of home purchases were made by first time buyers, which was a near record low. So now let’s look at factors and trends that have been helping to reshape the market here locally in Tampa Bay as well as nationally in 2015.
If you have been reading SI Real Estate Tampa’s blog this year, you have seen the extremely positive news and supporting statistics reflecting an exceptionally active housing market.  Many factors have contributed to this explosion.  Interest rates at historic lows, rising rent costs, move-up buyers, and of course rising home values.
One of the largest factors in this market shift (that cannot be overstated enough) is the extremely attractive interest rates on mortgages. Interest rates remain irresistible to close out 2015, yes even with the quarter point increase recently! Everyone knows this is coming to an end very soon (projected 1 point rate increase in 2016), so there is a huge sense of urgency to buy now while the rates are still at historic lows. Brian Teyssier, a realtor in Pittsburgh, echoed this same sentiment “the increased rental fees coupled with low interest rates and the fact FHA lowered their down payments- it’s a no brainer for those people that were renting to move their (five year) plan up.” Our real estate team here in Tampa could not agree more.
Another dominant reason to purchase right now is rising rent cost. At a certain point, it no longer makes financial sense to rent.  We reached that point early on this year and that trend is being echoed in most major metropolitan areas. So long as you can qualify for a mortgage, the buy option is simply a much better choice at this point and cannot be ignored. It now costs more to rent than to own your home! It has actually been a hot topic when talking with our buyers. No reason to pay $1600-$2000 in rent every month when you can own the same property for a mortgage that is less than rent! According to Zillow, “home values will increase by 2.5% at the conclusion of 2015, but rentals will outpace that figure, increasing 3.5%.”  As we are wrapping up the year, that estimation in our local Tampa market seems to be incredibly conservative!  

In addition to the first two factors, there are also an abundance of move up buyers who are now ready to list and sell their existing homes. They are then seeking an upgraded and/or larger home for their growing families. Most were not able to do this before now because their homes were worth less than what they owed the bank. Additionally, baby boomers are downsizing and enjoying a simpler life now that the kids have their own lives and places to live.  Everyone is back in the housing market!  
The last factor in the housing market resurgence we want to address is a hugely overlooked segment of the population, millennials.  Who said millennials are not interested in buying homes!? Not so!  The housing market has been seeing an increase in buyer activity from the millennial age group. Millennials (ages 18-33) are usually an overlooked segment of the housing market due to the recession hitting this group particularly hard. The overwhelming majority of millennials have not been able to get to the home buying phase of their lives. A few of the factors that caused this road block: rising rent costs, increased student loan debts, decreased post college job opportunities and flat wage growth.
These obstacles were improved for millennials in late 2014 noting a 60% better job growth compared to the overall US and unemployment dropping to 6%. This led to an increasing amount of 18-33 year olds looking for homes to buy. Realtor.com’s housing forecast for 2015 included a prediction that “millennials were more likely to buy a home in 2015 than any other” generation. We do not have the final numbers for 2015 yet, but we suspect realtor.com may have been right. No doubt this helped the turnaround we have been watching take place this year. 
With the economy, job wages, and labor market all going in positive directions… it is easy to see why the housing market is so attractive. More buyers, sellers and builders than we have seen in a long, long time! Confidence in the housing market, confidence in income, and confidence in the economy are leading to record numbers of houses sold this year, seemingly almost every month! We fully expect 2016 to keep the momentum robust. Stay tuned to SI Real Estate Tampa Bay for the latest updates!

Friday, December 4, 2015

Florida’s Housing Market Stays Hot! Here's why..

All year long we have been watching the real estate market heat up in Florida. There are many reasons why we are seeing a different resurgence this year!   A few of the key catalysts are: the Florida Legislature, interest rates and PMI insurance reductions. Each of these played a high valued role in the 2015 housing market. Combining all three, we can see housing is more affordable and there are a lot more people looking for housing!

 
Florida Governor Rick Scott is very enthusiastic about the housing market citing this past month as another remarkable one for the state. He is particularly proud of his tax cuts, saying “our work to cut taxes and create a business friendly environment is creating jobs and attracting more families to Florida because there are so many opportunities for success.” The team at SI Real Estate could not agree more. We have been helping families relocate to the Tampa area all year long, and know many more families are relocating this year, more so than a typical calendar year at our Brokerage.

 

More families are looking for homes to buy due to the sheer population difference from 2014. It is no secret Florida surpassed New York as the third most populous state due to 250,000 new residents who moved here in 2014.  Scott is proud and welcoming of the new additions to our Florida family!  No doubt that all of the relocations have helped spur the housing market to new heights.  The supply of homes available to purchase, and to rent had a tough time keeping up with the new demand, sending pricing up on both homes for sale and rentals. When supply is low, prices jump up and properties move a lot faster.


Interest rates have stayed low all year and PMI reductions are helping more people become buyers. This has led to record setting housing statistics seemingly every month. In August, a historically slow month for home sales, pending home sales rose 2% and time spent on the market dropped 19%. This month, the average single family home price rose to $199,000, up 12% from 2014. Condos and townhouses also saw a spike, 11% higher sales average. This is the 44th straight month that Florida home prices have gone up, 50th in a row for townhouses and condos. Clearly the real estate upward trend is here to stay.


Our agents here at SI Real Estate are informing our clients that now is the time to buy, before Real Estate prices come all the way back. If you haven’t thought about buying yet, it is time to get serious and make a move! There are many properties still on the market that are affordably priced, more so than equivalent rentals. Why rent at $1400 a month when you can own the same property for $1200? Makes no sense if you can qualify for a mortgage. 2015 may be the last year interest rates and home prices will remain this incredibly attractive. Stop waiting and missing out!  

Tuesday, November 24, 2015

We have a lot to be Thankful for this year!



Happy Thanksgiving everyone!
This year has been a true gift to the Real Estate world. All of us here at SI Real Estate are thankful for: Property values are rising back up, families are finally able to sell their homes for a fair price, interest rates are staying low and many other wonderful things!




We hope all of our family and friends have a very happy Thanksgiving! May you all enjoy a bountiful Thanksgiving. Wishing you a year filled with warm and cherished moments!

-SI Real Estate Team

Tuesday, October 27, 2015

Tampa: Ranked Top 6 in Nation for Real Estate Investors

Tampa Bay investors are finding out how hot the area is lately, ranking #6 among the top 50 cities for Real Estate investing. Everyone likes generating wealth, especially if the return (ROI) is on a real estate investment. It is extremely satisfying when you put your money to work for you. Real Estate investors look all over the place searching for the best property to invest their money in. Their money has been working extra hard here in Tampa. Over the past 12 months, Tampa’s investors have averaged 16.7 percent gross return on their investment. That is incredibly high, a very attractive rate of return and savvy financial or real estate professionals know it!  Good numbers equal good returns.  

The housing market has been on a steady and stable uptick all year. This has led to the increased activity in the real estate market that we are now seeing.  As more people learn and hear about the stabilization here in Florida, they want in on the action. Not so fast, supply is limited and we have been shifting to a sellers’ market since 2013.   The rock bottom super good deals are either gone as soon as they pop up or scarce.  An investor or owner occupant buyer needs to be prepared to act quickly if they want to land a great deal.

With property values increasing, and instances of competing offers becoming commonplace, offer strategies have to be altered. Higher offers, closer to asking price in 2015 is a pleasant surprise for sellers. This level of activity is consistent with the valuation of real estate and equity being on the upswing. South Tampa is exceptionally hot right now. Always has been, but especially so recently!  SI Real Estate sold a South Tampa property in 6 days last month.  Not only did it sell extremely quickly, there were 3 competing offers that led to full asking price. Chris Smith, owner of Bay to Gulf Holdings, went as far as to say “South Tampa (is) Impossible…. everybody wants to live there” in regards to finding deals.  Nibal Elsaadi, Broker at SI Real Estate, agrees! If this isn’t proof the market is booming, nothing is!


Not only is Tampa thriving with Real Estate activity, so are two other real estate hot spots here in Florida. No surprise, Miami ranks 3rd in the nation with 18.6% gross returns, and Orlando ranks 10th with just under 15%. For large volume property buyers, this type of market is not so great. When you have a market like Tampa, with attractive investment potential, more people look here to purchase. More people looking equals more competition, which means higher selling prices. On the other side of that fence, if you are listing a Tampa home with a local brokerage such as SI Real Estate, this scenario plays heavily in your favor. You will wind up getting more money for your home, back up offers, and a faster transaction from start to finish. It is refreshing to see all of the positive industry news coming out this year. As always, we love to talk about it and share it with you! Stay tuned to SI Real Estate’s blog for more updates soon! J

Tuesday, October 6, 2015

Florida’s economy has only gone up, since 2012!



It’s no secret by now that Florida is pushing past the recession this year in 2015. Economists and experts have been optimistic all year, and the data is continuing to back them up. Sean Snaith, a highly respected economist at UCF says Florida’s GDP will continue to climb at least through 2018. Could we really see economic growth lasting that long? Snaith fully believes so, citing average housing prices up, payroll being up and real gross state product steadily rising for a while now. The SI Real Estate team fully agrees, as we are seeing rising home prices as well as increasing rents here in Tampa, Florida. After all, our state boasts sunshine, beaches, palm trees, sand, and year-round weather which are all basically recession proof.





The desire for people to own homes in Florida or relocate here has never dwindled. The appeal of Florida has always been strong considering all that this state offers. The issue people were facing was selling their current homes, which was a bad move financially until 2013 on. That freedom to relocate has led to a surge in home buying in our great state. Earlier this year, SI Real Estate’s blog was discussing the 2014 to 2015 changes in home sales. From July 2014 to July 2015, median sales prices were up 8.1%. Highlighting this large positive statistical change, you can clearly see a large resurrection in the housing market. That is a large leap when sales are usually lackluster in summer time!



“Snaith is a national expert in economics, forecasting, market sizing and economic analyses who authors quarterly reports about the Florida state economy.” He is also published in the Wall Street Journal, CNN money and much more. So it is safe to assume he is an expert in the field and knows what forecasting. Snaith is also predicting job wages to continue an upward trend through 2018, rising 9% by then. How’s a 9% raise sound?

With a lower jobless rate on the way, as well as higher income and more money flowing through our state…. the housing market should continue its gains all the way into 2018! The transactions SI Real Estate has been a part of lately were mostly “move-up” buyers and sellers. These families have had the income and ability to upgrade their homes for a while now. However, they were unable to sell their current residences until the market picked up steam and prices raised back up- equaling the amount of their mortgages. The Tampa Bay area, including Pasco County, Pinellas County and the beaches has tremendous appeal to everyone! Second home buyers, owner occupied home buyers and renters can all find what they are looking for. With the economic upswing and forecast for even more improvement, there is no reason to be anywhere but Florida!

Snaith's full report:

Monday, September 14, 2015

Hot Home Sales in Tampa Bay. Nearly as hot as the summer weather!



2015 has been a pleasant year for the Tampa Bay real estate market, marking a full resurgence. Normally sales fall off during the summer vacations, but not this year! 
Homes listed for sale are continuing to seek out higher prices, while buyers are actively finding properties to put contracts on. A local North Tampa homeowner listed their house at $450,000 3 weeks ago and had a pending contract 8 days later, including backup offers. SI Real Estate has also participated in this high level of activity, selling three different properties in less than 10 days recently. While we normally see soft interest during summer months, especially July that has is not the case in 2015!




”Statewide in July, the inventory of available homes tightened to a 4 1/2-month supply. Most analysts consider a six-month supply to be evidence of a balanced market between buyers and sellers,” said John Tuccillo, chief economist of Florida Realtors. He is demonstrating here that inventory is dwindling and shifting the scales towards a seller’s market. Obviously that is resonating with homeowners.  To include all buyers and sellers, some of our 2010 investor clients have reached out to us lately to sell their properties.   The conversation starts as a gauge of where their real estate values are, leading to a review of comps for their properties. Most are pleasantly surprised to find out their home’s current value, prompting some to start the process of listing their homes. Could mean a great September and 4th quarter!

One of the main reasons there has been a surge this summer is fear of interest rates going up. The FED has not raised the rates yet, in fact rates are still at historic lows. This is welcoming news for everyone in the market to purchase or sell a home.  The reduction in PMI insurance has also helped spur this real estate turnaround. Buyers can afford more home this year than they could last year, while keeping the same income so both the seller and buyer have a win/win.

Tampa Bay real estate is in full bloom this summer; do not miss out. It’s natural for people to want to feel the same positive emotions that their friends or neighbors are experiencing. If you know someone that has had a great real estate transaction lately, maybe you should think about your own goals or desires. Don’t sit on the sidelines anymore or miss out on your dream. People are finding their dream home, or are finally able to sell their current home and relocate. So if you have been thinking of relocating or upgrading, check out all of the options available to you. This is what we have seen and been experiencing lately at SI Real Estate and we would be glad to help you too.


Wednesday, September 2, 2015

Real Estate Pulse: July New Home Sales up 25%!

July New Home Sales up 25%!



If you have been following SI Real Estate’s blog this year… we have been tracking the housing market from January all the way through now.  As predicted, the market has been rebounding all year! The most recent news is fantastic, with New Home Sales up 25% in July 2015 versus July 2014.  That is a LARGE rebound in a short amount of time. Another pertinent statistic for tracking the real estate market: we saw an increase of new home sales from June to July, up 5.4% or 26,000 more home sales in July.

The numbers that were just released reflect what we are seeing here in Tampa Bay. SI Real Estate’s most recent for sale listings have been extremely active, one of which went under contract in just 6 days - pretty much for the exact listing price too. Homes priced at $750,000 + have been seeing increased activity as well.  Around 6% of all new home sales in July 2015 were at the $750K+ price range.  That is 3% more than June, doubling the sales in that price range.




Consumer confidence has been the highest since 2005, which is bringing more and more investors to the market. They are no longer sitting on the sidelines; they are out there buying and selling real estate!  Another reason sales are up: people are finally willing to list, sell, and relocate.

2015 has been steadily rebuilding the Real Estate market, both here in Tampa and Nationally. Homes are being sold at higher prices, and in a timely manner compared to last year. My neighbor listed her house at $450,000 and had a pending contract in 8 days, including backup offers. SI Real Estate has sold two different properties in less than 10 days so far this July. We hope to see more of the same to close out this year! Continue to follow our blog updates to stay informed about the most current Real Estate trends.



Wall Street Journal reporting on July Home sales:


Friday, July 10, 2015

Real Estate Update: Pending Home Sales reach highest level in 9 years!

It’s no secret the housing market is making a strong comeback. Inventory is incredibly scarce.  Buyers are confident enough in the economy to be actively searching for real estate to purchase. This is leading to a shortage of ready-to-move-in homes. When there is a housing shortage, buyers need to act quickly and sellers are now stepping in. This has been the driving force behind skyrocketing pending home sale statistics. Probably the most positive statistic (there are many this month) is “45% of homes sold within 30 days of being listed”. That is a staggering number compared to what we were seeing since the recession began.



Another major factor leading to the housing market surge is because of the historically low mortgage rates. If you could afford a $300,000 home last year, you can get approved for a $330,000 mortgage today. This is due to rates hovering right at 4% and buyers have more purchasing power after sitting out last year.

We have not seen this much buyer activity in a long time here in Tampa Bay. There has also been a spike in the rental market as well. Rental prices have been rising in the last 12 months nationally, as well as here locally in Tampa. This has been a direct cause of buyer activity since renters are looking hard at all of their options. What they are finding out now is that it’s an excellent time to own versus rent, especially with the 30 year rates staying so low! The shortage of rentals is leading to shortage in for sale properties… and the whole housing market has been activated.



Friday, June 12, 2015

Real Estate Pulse: Tampa’s Rental market is on fire! Act on it or the property will be gone in a flash!

Real Estate Pulse:  Tampa’s Rental market is on fire!  
Act on it or the property will be gone in a flash!

SI Real Estate is a full service real estate boutique in Tampa Bay, including property management.  We have seen a significant increase in rental activity since February, 2015. As the year has progressed, so has the interest in Tampa’s rental market!  Right now, our agents are finding that rental listings are gone in a New York minute.  We are receiving calls and emails from an abnormal amount of new residents relocating to our area, causing the demand to drastically outweigh the supply.



This trend has not gone unnoticed by property developers in the area especially our urban core. They are purchasing land and building multifamily high end rentals, rather than luxury apartments or condos for sale.  Jeff Vinik has been at the forefront of this new demand. Starting with revitalizing the Channelside District.  The city of Tampa and developers are adding exciting urban attractions such as the popular Tampa Riverwalk. "I think people are buying into the story now that downtown Tampa will become a real downtown," Mike Davis, an executive director with Cushman & Wakefield of Florida Inc.  We are noticing the same effect, with interest in areas/price points that have not been popular in the past for our local rentals.

Here in Tampa, rentals have always been available as long as you have a fair budget. In SI Real Estate’s experience lately, this has not been the case! The vacancy rate of the rental market here has been pretty average the past 15 years, until now. Our vacancy rate has hit a 9 year low this year, 4.9% of all apartments here are vacant. That figure is lower than all 19 other southeastern metro areas that the company tracks. Now we know why we are having a tough time scheduling showings for rentals! They are gone as soon as they come up online or on the MLS.  Our landlords are using this high demand as a great reason to bump the rent pricing back up to pre-recession rates. Another market correction underway… Possibly the final stretch!



Apparently developers want in on all the action the rental market has been seeing. “Data from Vertica Partners LLC in Tampa shows more than 10,000 potential units — projects in various stages of development, between downtown Tampa, South Tampa and the Westshore area.” These areas are the crème-de-le-crème and seek the highest rent in Tampa Bay. They must be listening to market experts who are echoing that the vacancy rate will stay this way for the next year and a half. Rent prices will also keep rising according to industry leaders. By Real Data's figures, “the average monthly rent for a two-bedroom bay area apartment this year is $1,046 — $40 a month higher than a year ago and $176 higher than in 2010. Rents are expected to rise another 2 to 3 percent annually, the most in the Southeast, the report says”. SI Real Estate will keep an eye on the market while we remain incredibly busy putting families into homes, rentals and buyers!  Are you in?   

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