Bird Key 2009 Year End Real Estate Perspective

There were 34 homes sold this past year, identical to 34 in 2008, 32 in 2007 and 18 in 2006. The annual sales volume was $32,000,000 compared to $46,000,000 in 2008 and $75,000,000 in 2007. The main reason for the significant decrease in the sales volume is that there has only been one sale of a substantial bay front home this year. Homes sold on average for 76% of list price compared to 80% in 2008. The average days to contract are down from 200 in 2008 to 181 days. Twenty three of this years closed sales were garden homes as opposed to the more expensive waterfront homes. The average sale price for a bay front home has declined 40% from the sold price in 2008 and 2007 while the average sold price for a canal front home has decreased only 10% and a garden home’s average price has decreased 29%. Bay front homes sold for an average of $558 per square foot, canal front homes for $326 and garden homes $249.

Beginning in 2010 there are 39 active listings available on Bird Key, identical to the beginning of 2009 with prices ranging from $539,900 to $9,490,000. There are 8 pending sales to start the year.

Bird Key 2009 Year End Sales Statistics

Bird Key 2009 Sales

Investing Wisely in an Economic Downturn

If you’re in a position to invest in today’s real estate market, you may be able to take advantage of some once-in-a-lifetime deals. All investment comes with risk, however, and this is no time to ignore warning signs of deals that can sour quickly. Keep these guidelines in mind when considering your potential investments:

Rise above the times. Investors who are able to navigate tough times such as these and still come out ahead are in the best position for long-term success due to a consistently strong track record.

Do your homework. If you’re selling, be sure to pre-qualify buyers to avoid a deal falling through because of inadequate financing.  Avoid unpleasant surprises by knowing exactly who and what you’re dealing with—spend the necessary time and energy to perform thorough due diligence.

Seek out alternative and flexible lending. Cash is always most desirable and gives you the greatest negotiation leverage.  If possible, generate private money and financing solutions in order to avoid traditional, now stricter, lending.

Don’t settle.  In a buyer’s market, savvy investors are wise to generate as many prospects as possible and select from among the best.  Establish criteria for your goals and don’t compromise. If a real estate deal doesn’t meet your standards, move on to the next one.

Plan your exit strategy and have more than one. Contingency planning and multiple exit plans are essential to mitigating risk. Always have more than one backup plan, and be ready for worst case scenarios.  Ample equity and cash flow are essential.

30-Year Fixed Rate: the Number Everybody is Watching

At a time when the housing market is struggling to recover, the slightest mortgage rate adjustment is scrutinized since even a minor rise stands to lessen the buying power of borrowers. In the most basic of terms, lower interest rates afford buyers more house for their money.  Additionally, higher interest rates typically cause home prices to fall.

In the last report of 2009 by Mortgage-industry giant Freddie Mac, the rate on a 30-year fixed loan rose to 5.14 percent, up from recent lows below 5 percent.  The report also revealed a higher cost of adjustable-rate home loans. This rise is consistent with predictions that the 30-year fixed rate will reach 6 percent in 2010. While still low by historical standards, this is a change that affects the delicate state of the housing market which is inextricably linked to the overall economic recovery.

Tax incentives for first-time buyers and low interest rates are the two factors that have most influenced the recent welcomed increase in housing demand. However, the tax breaks are scheduled to end by mid-2010 and the Fed plans to stop buying mortgage bonds in the first quarter. This will stop the flow of money into the market for housing finance, and may constrict available credit.

Along with interest rates, lending standards are a key factor of housing market recovery. The two go hand in hand since borrowers can only take advantage of low interest rates if they get approved for a loan. With high foreclosure rates expected in the new year, banks and regulators are guarding against the risk of bad loans.

The Year in Real Estate

As many analysts predicted, the foreclosure trend that began in 2008 worsened sharply in 2009. Despite substantial government bailout, 2009 brought with it some of the highest residential foreclosure rates in history. While existing home prices followed foreclosures and fell dramatically, sales did bounce back slightly, due, in part, to the first time home buyer tax credit.  Leveraging the tax credit incentive, builders lowered prices to offload excess inventory which helped new home sales to improve.

So, what can we expect in 2010? Here’s a recap of some of the agreed-upon predictions:

• The decline of the residential housing market isn’t over. It will probably dip again mid-year before entering into a true recovery in the second half of 2010.
• Government incentive and assistance programs scheduled to end in the spring will slow home sales.
• Rising foreclosures, linked closely to high unemployment, will result in excess inventory and will continue to negatively influence home prices.
• 30-year fixed mortgage rates will begin to rise from historic lows and level off in the 6 percent range.
• Low vacancy, rock bottom rent, and high default rates will continue to plague commercial real estate for the foreseeable future.

With such gloomy predictions, it’s important to keep in mind that trends aside, the real estate market is still alive. People are still selling, and people are still buying. If you are in a position to take advantage of this buyer’s market, consult a local realtor to discuss your strategic options.

Real Estate Report for 2009

Now that 2009 is behind us and we are on to 2010 I want to summarize what transpired in the Sarasota County real estate market the past year. There were a total of 8,084 properties sold the past year with 5,640 being single family homes and 2,444 being a condominium. The following table summarizes what happened in each price segment. All statistics are as of the end of 2009.

70% of 2009’s sales were single family homes and 30% were condominiums. Of the total sales, 73% were properties that sold for $250,000 or less, 18% were sold for between $250,000 and $500,000, 6% sold for between $500,000 and $1,000,000 and 3% sold for over $1,000,000.

As the statistics relate to listed properties at year end we have 10.1 months of inventory overall. There is only 8 months of inventory for properties listed under $500,000, in the price bracket of $500,000 to $1,000,000 there is 23.4 months of inventory and over $1,000,000 there is 46 months of inventory. In general six months of inventory is considered a neutral market meaning neither a buyers or sellers market.

Obviously the first time home buyer tax incentives coupled with low interest rates has had a wonderful effect in lowering inventory for homes listed under $500,000. Here’s to hoping that buyers begin to realize home prices have bottomed out and we start to reduce the inventory of luxury homes. 2010 here we come.

It’s Time to Take Advantage of Low Interest Rates

You may already know that the country is experiencing historically low interest rates, but have you taken the time to examine what this means for you as a potential home buyer?

Right now, the average 30-year fixed-rate loan with no points or fees is around 5%. Forty years ago, in 1970, the 30-year fixed rate was around 7.25%. Since then, the rate began a steady, then sharp, rise which peaked at 18% in the early 1980s. Although the rate did decline to recent levels of 6%-7%, it took nearly 30 years to do so. This tells us that, historically, this particular rate rises much more quickly than it declines.

If you are even considering buying a first time or new home, now is the time to act. Bear in mind that the financial impact of the fixed-year mortgage rate on the cost of purchasing and paying off a home is one of the most important buying factors.

Here’s why this is true:
Every quarter-point change in the interest rate is equivalent to approximately $6,000 for every $100,000 borrowed over the course of a 30-year fixed mortgage. Therefore, if you put $40,000 down and borrow $200,000 to pay the price of a home, each quarter-point increase in the interest rate will cost you $12,000 over the life of the loan. By the same token, if every quarter of a point is worth $12,000 per $200,000 borrowed, then each whole interest point is worth almost $50,000.

To bring this into perspective, consider the price difference over the loan for a $240,000 home at rates greater than the current 5%. At 6%, the mortgage payoff on the same home will be approximately $50,000 greater. At 7%, the total amount swells by nearly $100,000 over the period of the loan.

If you have plans to purchase a home or if you are considering a move to a larger home, you are wise to keep a very close eye on interest rates and act before they take an upward turn. In reality, they stand to affect your mortgage and total loan cost more than the price of the home.

Sarasota Tops the List of Best US Home Markets!

Barbara Corcoran recently revealed a Top Ten List of the Best Real Estate Markets in the country on NBC’s Today Show. Topping the list at #1 was Sarasota—one of two Florida cities to earn a mention; the other was St. Petersburg.

Criteria for the list included cites whose home prices dropped the most since last year and are trending upward. Corcoran explained that prices are expected to continue to rise due, in part, to smart city planning. “This is the time to buy in these particular places,” she says.

A sophisticated urban city with all the amenities that one would expect plus beautiful beaches helped place Sarasota at the top of the list. Citing statistics from the National Association of Realtors, Corcoran noted that with a current median home price of $175,800, Sarasota prices have dropped by a full one-third since last year. On the recovery, home prices are up 13% in just the past quarter and the timing is s right for buyers and investors.

Making Your New Apartment ‘Home’

You’ve probably already called the cable guy and arranged for your utilities to get hooked up before move-in day, but here are a few things that will help you settle into your new digs that you might not have thought of:

• Change the locks. Safety first. Check with your landlord about providing him or her with a new key, but don’t risk an old tenant dropping by uninvited.

• Consider your electrical needs. Lamps, stereos, televisions, game systems, and DVD players tend to fight for outlet space. Plan ahead for what will need to go where and make sure you have the proper outlet configurations.

• Check for unwanted guests (like rodents and bugs). If they’re not paying rent, they’ve got no business in your apartment. Call an exterminator before you move your things in and schedule maintenance visits as necessary.

• Plan a cleaning day. Hopefully, your landlord has already given your apartment a good cleaning, but most people like the security of knowing that something is really clean before using it—especially the bathroom, kitchen, and floors. If possible, plan a cleaning day before your move-in date so you don’t have to shuffle things around.

• Clean and disinfect the fridge. While you’re cleaning, take this opportunity to remove spills, food residue, and odors from your refrigerator before you stock it.

• Change the toilet seat: Speaking of clean, this is one area you don’t want to make any assumptions about. For under $20, you can get a factory-fresh commode topper. We highly recommend it!

• Make it your own. You’re starting with open floors and bare walls. Take advantage of this time to imagine the perfect living space and create it!

Two more sources for information:

Real Estate agents – Worldwide real estate companies directory and property buyers and sellers guide.

Real Estate Blogs Directory – Directory of real estate blogs and blogs of industries affiliated with and
serving the real estate industry.

Quick and Easy Tips to Ensure a Good Showing

You’ve done your research, priced your home accordingly, and now you’re ready to show. With so many homes on the market, you’ll want to do anything you can to help yours stand out. Here are some tried and true (though sometimes overlooked) tips for presenting your home to potential buyers.

• Check the view from the street. To what will the eyes of potential buyers be drawn before they enter your home? Peeling paint or dirty windows are a turn-off. Make sure your walkway and front door areas are attractive and in good repair.

• De-clutter. Remove excess furniture, knick-knacks, and other non-essential items to reveal spacious counters and clear tabletops. Doing so will create the appearance of more space.

• Add light. Open window shades and curtains, and invest in a lamp or two if necessary—anything you can do to fill your rooms with light.

• Eliminate odors. Air out the house before a showing (even in winter!), and consider baking some cookies. The ‘smells like home’ atmosphere will go a long way in making buyers feel welcome.

• Add some greenery. Live, healthy plants and fresh flowers are a nice touch and send a signal that you put that extra special touch into your living space.

• Make it sparkle. Although it may seem basic, don’t forget that your kitchen and bathrooms should be spotless. No dishes in the sink or on the counter, and no clothes or used towels littering the bathroom.

How To Increase Your Home’s Appeal

In a word, it’s all about space. Create more of it where you can, and showcase the space you have.

Buyers need to be able to envision what their things will look like in your home. To help them do this, you may need to store, eliminate, or rearrange your own furniture and belongings. Remember, it’s only temporary!

First, take stock of your furniture. Does it occupy more than 50% of a room? If so, consider storing or getting rid of it. Or, find a way to distribute it in other rooms, if suitable. If you are unsure about what this looks like, consider visiting a few model homes. It’s not for lack of budget that they are sparsely furnished; it’s so that you can visually assess the rooms and contemplate how you might furnish it with your things. Even if you don’t have large, spacious rooms, less ‘stuff’ in each of them will make them appear bigger.

Next, clear out your storage areas. This includes basements, attics, garages, and sheds. You don’t typically access these items anyway in the course of a month, so now is the time to pack them up and store them, sell them, or donate what you can to a charitable organization. When showing your home, you want any storage areas to be as empty as possible.  One of the biggest buyer deterrents is fear of not having enough room for their family to grow into.

Lastly, clean your closets. Closets, if you are blessed enough to have them, inevitably end up as a collection center for odds and ends and anything that doesn’t have a designated home. Hanging clothes, daily footwear, and a few shelved items should be the only things visible. A buyer doesn’t know (or care) what you own, but if your closet looks ‘stuffed’, they’ll wonder how their necessities will ever fit in such a small space.