Headlines – Week of February 19, 2012
February 27, 2012
Second Home Market May See Increase
According to the S&P/Case-Shiller index, property values in 20 cities declined 3.7 percent from November 2010.
Rather than relocate, many homeowners are improving their existing residences, with the National Association of the Remodeling Industry expecting $113.6 billion to be spent on remodeling through the third quarter.
The article points out that despite the fact that 30-year mortgage rates are under 4 percent and home prices have remained low, many people still can’t to take advantage of increased housing affordability since their personal balance sheets are a mess.
But according to a recent article in Realty Times, the second-home market may be a shining star in the real estate market.
Experts predict a growing number of baby boomers will snap up vacation and rental properties in the coming years, with many planning to retire in these homes.
Second-home buyers tend to purchase distressed properties at a discount, but experts say the dwellings are vacant for 90 percent of the year and that buyers could be earning rental income. Second-home buyers should work with a professional to learn the opportunities available to them with regard to renting, as those who use the property for no more than 14 days per year can deduct as much as $25,000 for maintenance and other expenses.
Baby Boomers Geared Up to Move
So, as baby boomers retire, where will they go?
A new survey conducted by Mason-Dixon Polling & Research for the Consumer Federation of the Southeast finds one in three could move out of their home state in search of low taxes, low housing costs, pleasant climates and quality health care. They also want diverse recreational activities, supportive senior services, arts and cultural opportunities, nearby beaches and access to education. The baby boom generation has 78 million members, and the first wave – those born in 1946 – reach the full age for Social Security retirement benefits this year. According to the survey, a full third of baby boomers are open to moving across state lines to find the assets they are looking for, including a mid-size town that welcomes a diverse population. Attracting even a small percentage of boomers can significantly impact a community. If just 0.3 percent move to a single area, it adds an estimated 1 billion per year in new economic income through jobs and new business.
- More than half (58 percent) plan to buy a house in their retirement relocation destination.
- Some 96 percent of baby boomers surveyed say top-quality health care services are “very” or “somewhat” important to them in considering a relocation destination.
- Affordable housing ranks second, with nearly 92 percent ranking that as a “very” or “somewhat” important criterion.
- A warm, welcoming year-round climate is “very” or “somewhat” important to 85.5 percent – but a strong plurality of this group want their warm summers to be paired with a few cooler months.
- Low local taxes are “very” or “somewhat” important to 81.1 percent.
- Eight out of 10 relocating boomers want affordable recreational opportunities in a relocation destination, and about the same number seek strong local services for elder care.
- Seven in 10 prefer a mid-size city or small town.
- Arts and cultural opportunities are very or somewhat important to three in four.
- Beaches or ocean nearby is very or somewhat important to about six in 10.
- Educational opportunities are important to about half. A large university is a plus for four in 10 boomers willing to consider relocation.
- Diversity in a location is very or somewhat important.
Almost 54 percent of respondents indicated that the weak economy was not delaying their retirement plans, but about 36 percent said that the economy had delayed retirement.
Pollsters asked respondents to name – unprompted and with no suggested options – a state they might consider relocating to for retirement. About 18 percent mentioned Florida as a top relocation destination.
Florida Housing Market Upbeat in January 2012
According to the latest housing data released by Florida Realtors®, Florida’s housing market reported gains in median sales prices and a reduced inventory of homes for sale in January.
In both the statewide single-family and condo-townhome markets, pending sales were higher and the statewide median sales price rose – up 5.3 percent to $129,000 for single-family homes and up 18.8 percent to $95,000 for condo-townhomes.
Improving the availability of affordable financing to qualified buyers and investors would continue to stabilize Florida’s housing market and economy.
The median is the midpoint; half the homes sold for more, half for less. Sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.
The national median sales price for existing single-family homes in December 2011 was $165,100, which is 2.5 percent below the previous year, according to the National Association of Realtors® (NAR). In California, the statewide median sales price for single-family existing homes in December was $285,920; in Maryland, it was $222,934.
Florida statewide sales of existing single-family homes totaled 12,044 in January 2012, down 5.5 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing.
Looking at Florida’s year-to-year comparison for sales of condos/townhomes, a total of 5,963 units sold statewide last month, down 22.6 percent from those sold in January 2011. According to NAR, the national median existing condo price in December 2011 was $160,000.
Even though closed sales are down from a year ago, the report highlights two bright spots in Florida’s housing market. One is a significant increase in pending sales. In fact, pending sales have been up every month since May. The barrier that stands between pending sales and closings is the difficulty consumers are experiencing in obtaining financing.
The second positive is inventories, which are now at a point close to a balanced market. The months supply of inventory stands at 6.4 for both the single-family homes market and the condos/townhomes market.
Posted by Scott R. Lodde