Headlines – Week of March 13, 2011
March 22, 2011
Florida Growth Outpaces National Trend
According to data from the 2010 Census, Florida has registered its seventh consecutive decade of double-digit population growth. While the nation as a whole grew by 9.7 percent, the number of Florida residents surged 17.6 percent as 2.8 million more people moved in from between 2000 and 2010, well above the 9.7% national rate.
However, the numbers tell a story of two different half-decades as the first half was so great that it made up for any decline of the past few years. Annual growth that had peaked at 2.3% in 2005 fell to 0.5% in 2009 and 0.7% in 2010.
The state’s growth was driven primarily by migration, particularly by domestic migration from other parts of the United States.
The state’s population gains also materialized despite a high rate of unemployment coupled with a housing slump. The Census statistics reveal that almost 1.7 million new residential units were constructed over the past decade, for a total of 8.9 million; however, the number of vacant properties grew nearly 63 percent over the same time frame to 1.5 million from 603,760.
Flagler County, north of Daytona Beach, was the fastest-growing county, up 92% to 95,696. Sumter County, home of The Villages retirement community in central Florida, grew 75% to 93,420, and Osceola County, just south of Orlando, grew 56% to 268,685.
Even larger and more densely developed areas gained: Miami-Dade, the largest county, up 11% to 2.5 million; Jacksonville, the largest city, up almost 12% to 821,784.
St. Petersburg and its county, Pinellas, were among the few decliners. The state’s fourth-largest city lost 1.4% of its population since 2000, down to 245,000. Pinellas fell 0.5% to 916,542.
10 Real Estate Markets to Watch in 2011
According to an article in Inman News, real estate markets in the Midwest and Northeast dominated a list of 10 fast-rising real estate markets nationwide as many markets in the Sun Belt states are still struggling through the housing downturn.
Inman examined housing, economic and demographic data for metropolitan areas nationwide in compiling a list of 10 housing markets that are showing signs of strength and may outperform other housing markets in 2011 in several key metrics.
The Midwest and Northeast U.S. accounted for eight of 10 markets on the list:
- Bismarck and Fargo, ND
- Des Moines, IA
- Bloomington-Normal, IL
- Elmira and Buffalo-Niagara Falls, NY
- Portland-South Portland-Biddeford, MN
- Burlington-South Burlington, VT
The other two markets on the list: Kennewick-Richland-Pasco, Wash.; and the Washington, D.C., metro area.
Inman News identified some markets with significant price appreciation as well as a vibrant job market, a high level of home affordability, low foreclosure activity, and other indicators for a healthy housing market. Most have populations below 250,000. In addition, jobs in the health care industry and public sector, especially, buoyed employment in these areas.
To compile the list, Inman News considered markets with low unemployment rates, high median sales price growth, growth in the number of building permits issued, a rise in in-migration from other states, population growth, projected job growth, affordability, low foreclosure activity, median household income growth, fewer average days on market for for-sale properties, and growth in occupied housing units.
Among the findings in this report:
- Of the states represented in this list of market areas, North Dakota, Vermont, Iowa and, to a certain extent, New York also shed fewer Realtors during the housing bust compared to other states.
- Two of the 10 markets on this list are state capitals and one is the nation’s capital — agents say government centers can lend job stability.
- Six of 10 markets had median sales prices below the national median in the fourth quarter of 2010, and seven out of 10 had median prices lower than the national median price for the full year in 2010.
- Where affordability rankings were available, the markets on the list had no less than 75 percent of homes affordable to those households earning the area’s median income.
- All had unemployment and foreclosure rates lower than the national average. None of the markets had unemployment rates higher than 8.2 percent.
- Only two of the markets had populations above 1 million. Six of 10 had populations below 250,000.
- Companies in the health care and medical industries were major employers in at least seven of the 10 markets.
- Seven out of 10 markets had some military presence. The Fargo, Burlington, Portland and Des Moines metro areas are each home to an Air National Guard base. The North Dakota National Guard Headquarters are in Bismarck. There’s an Air Reserve Station in the Buffalo market.
- The Washington, D.C., metro area had the largest military footprint of the 10 markets: the Pentagon, Bolling Air Force Base, Fort McNair, Walter Reed Medical Center, Marine Barracks and Washington Navy Yard are within its limits.
Harsh winter may have triggered vacation home market rebound
A recent market study from Cotton & Company indicates increasing consumer confidence after several years of negative trends in the real estate industry. The third annual Cotton Report polled more than 800 participants on housing preferences, motivating factors, pricing levels and timelines for purchase. The survey included participants from 39 states, as well as Canada, Europe and Latin America.
While no direct correlation was made to the harsh winter temperatures, the research survey indicated a substantial increase in the number of homebuyers seeking a vacation home purchase, an increase of 800% year-over-year. This trend is further supported by an increase in the number of buyers describing their transition as a geographic relocation, now 40%.
Over the three-year period of the annual research study, a continuous trend towards smaller homes has been noted with the most popular size home now being 1,700 to 2,299 square feet. Homes ranging from 1,000 to 1,699 square feet saw an increase of 5% in interest levels from 2010 to 2011.
The Cotton Report also shows signs that pricing levels have adjusted to meet consumer expectations. In 2009, respondents indicated the need for a 50% reduction in order to re-enter the market. In the 2011 survey, this level of price reduction has changed dramatically with the median response being a 20% reduction. This trend was also reflected in the consumer’s timeline to purchase. In 2011, 25% of the respondents reported they would be purchasing within 6 months, an increase from just 4% at the same time last year.
The annual consumer report is compiled by Cotton & Company, a 28-year-old real estate firm.
Gen X Buyers to Lead Housing Recovery
According to real estate experts in a recent webinar produced by the National Association of Home Builders, Generation X, adults ages 31 to 45, are expected to lead the recovery in the housing market. Speakers at the event highlighted results of a survey of 10,000 buyers in 27 metro areas.
While Generation X isn’t the largest population group, making up 32 percent of the population compared to 41 percent of baby boomers, it’s the most mobile age group.
The Gen X generation is coming with their own set of house preferences that may differ from other generations. Even though home sizes continue to shrink, first-time buyers and younger families are looking for more room to grow. Nearly 50 percent said they prefer a home with a large lot and in a suburban development. Only 21 percent said they are looking for a traditional or “walkable neighborhood” according to the survey.
This generation wants “green,” energy-efficient features. Regardless of age group, 70 percent of buyers said in the survey they are willing to pay $5,000 more for a home with “green” features.
Posted by Scott R. Lodde