Cape Coral, Fort Myers, Naples ranked in top 10 in housing price increases

The Cape Coral-Fort Myers area was again third and Naples was rose to sixth in quarterly housing prices, according to a survey by the National Association of Realtors.

The median existing single-family home price increased by 64 percent of measured markets, with 142 out of 163 metropolitan statistical areas showing gains based on closings in the first quarter of 2016 compared with the fourth quarter of 2015, according to the report.

Fifty areas, 25 percent, had double-digit gains;  and 9 had price declines.

Cape Coral-Fort Myers had an increase of 21.4 percent to $183,800. Sacramento, Calif., was first at 27.1 percent and Atlanta was second at 24.7 percent.
Naples, in sixth place, had an increase of 20.1 percent to $355,500.

Figures Released: Market for new homes rebounding strongly in SW Florida

Despite rising costs for land, building materials and labour, the latest US government figures show building starts and permits ramping up sharply indicating builders’ optimism about the future. With resale inventory having been dramatically absorbed over the last few months, consumers haven’t been able to find what they want and given the choice, most people are now steering toward new build construction as consumer confidence returns to pre-recession levels and household balance sheets are on the mend.

The new home inventory in the Naples-Fort Myers market dropped to only a 1.1 month’s supply in the fourth quarter of last year compared to a normal supply of between two and three months of finished vacant homes- meaning that almost every home under construction has been claimed .Likewise, the inventory of finished, developed residential lots has reached its lowest number in years. In the fourth quarter 2013, there were 11,227 lots less than 25% of the supply available in early 2009.

Building permits nationally are running at the highest levels they’ve been in the last five years with Southwest Florida outstripping the nation for single family homes.Some 634,000 single-family homes were permitted in November, a 10.5 percent increase from November 2012, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. Lee County reported permitting 66 single-family homes and duplexes for the month, up 50 percent from the year before.

Meanwhile, the NAHB/Wells Fargo Housing Market Index (HMI), which measures builder sentiment in the single-family housing market, has been above the 50 mark for the past eight months. Any reading above 50 means that more builders view sales conditions as good than poor. Even though builders are taking out permits at a breakneck pace, they may have trouble keeping up with relentless demand over the coming two years, said Brad Hunter, chief economist of research group MetroStudy. “All of the people living in their parents’ basement will be getting their own places,” he predicts. He expects new construction to rise by 20 percent over the period in Southwest Florida, but added that it ought to be higher to meet demand.“The constraint is finding enough plots in good locations and enough skilled workers to build them,” he said. Of course, low inventory levels have allowed builders to raise prices by 11 percent, to $270,900 in November from the same month a year ago, according to the National Association of Home Builders.

Stronger job growth and a strengthening economy in 2014 should lead to a rise in household formations, which will be important to supplement housing demand suggesting a building boom. Lawrence Yun, chief economist for the National Association of Realtors noted there still is pent-up demand for all kinds of housing, which continues to push up rents and home prices. In Southwest Florida, rapid population growth has put extra pressure on the current supply of new homes with Lee County’s population, which swelled by a third to 586,925 from 2000 to 2010, expected to grow an additional 0.2 percent by 2014.

So consumers are back, pent-up demand is emerging, there is a growing need for new construction, distressed sales are diminishing and builders eager to construct again- there certainly seems a strong case these days to invest in developed Florida land plots.

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Naples-Ft. Myers Housing Report Shows Renewed Strength

“Home buyers are showing a new sense of urgency, wanting to buy while home prices are still attractive, and wanting to beat further increases in mortgage rates,” said Brad Hunter, Metrostudy’s chief economist.
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Southwest Florida makes Top 10 for housing price increases

The Cape Coral-Fort Myers and Naples areas were both in the top 10 nationwide for home-price increases in the second quarter as Southwest Florida’s battered housing industry came back with a vengeance.

A National Association of Realtors survey showed that the Cape Coral-Fort Myers median existing single-family-home sale was up 36.1 % to $177,900 compared to a year earlier.
Naples was seventh with a 29.3 % increase to $346,600.
Nationwide, home prices continued to rise in the majority of metropolitan areas in the second quarter, with the national price showing the strongest gain in 7½ years, according to the survey.
“The Naples-Fort Myers market was one of the worst beaten-up markets in the downturn,” said Brad Hunter, chief economist for Metrostudy, a national housing data and consulting firm that maintains statistics on residential construction. “And it’s my view that what drove prices to extremely low levels then let them come up from the bottom faster.”
Brett Ellis, head of The Ellis Team with Re/Max Realty Group in Fort Myers, said prices in Lee County are still rising but not as fast as they did at the beginning of the year.
Still, he said, it’s a seller’s market as the inventory of homes for sale continues to decrease: 4,956 in June compared to 5,448 a year earlier.
“We’ve got buyers that are really looking to buy now because they’re afraid,” Ellis said. “They see the price increases, and they’re also afraid the interest rates are going up.”
He expects prices to continue rising throughout 2013 as those buyers get in the market. “It’s all encouraging, but there are not a lot of choices for buyers.”
Lawrence Yun, NAR chief economist, said tight inventory is continuing to drive home prices.
Those trends are in force throughout the country, Yun said in a release. “There continue to be more buyers than sellers, and that is placing pressure on home prices, with multiple bids common in some areas of the country.”
Hunter said rising prices likely will stimulate the purchase of homes as owners find themselves able to sell at a good price.
“The higher prices go, the more people are no longer underwater and can pay off their mortgages,” he said. “I do think you’ll see more sellers.”

Orlando home prices up 37% since start of 2012

Home prices in the core Orlando market during May were up 23 percent from a year ago and 3.1 percent from a month earlier, a new report shows. The median sales price for the month was $148,000 – up from $108,000 at the beginning of last year.

Orlando-area home-resale prices have risen more in the past 12 months than they would typically increase during five years of steady appreciation.
Existing-home prices in the core Orlando market during May hit a median of $148,000 – up 23 percent from a year ago and up 3.1 percent from just a month earlier, according to a report released Monday by the Orlando Regional Realtors Association. Perhaps more remarkably, prices have increased 37 percent since the start of last year.
“I can tell you from the listings I am putting up for sale, they are not lasting more than two to four days on the market – and people are willing to pay more than the asking price,” she said.

Even though homeowners may celebrate the robust price growth, which comes on the heels of a five-year housing bust, the run-up in price since January 2012 raises questions about whether the local market is headed for another letdown. Some experts cautioned Monday that prices will soften as banks release more foreclosure properties onto the market.
One indication that house prices may continue to appreciate, though, is that they are still far below where they would have been if the housing bubble had never occurred and values had instead ticked up at their long-term average rate of 3 percent a year, said Stan Smith, a finance professor at the University of Central Florida.
“Until we get up to around 2004 price levels, I’m not sure these increases are a problem,” said Smith, who studies housing appreciation. “We are probably at about 77 percent of where we would be if we had never had a bubble and it appreciated at 3 percent a year.”

One of the main factors driving the fast-escalating prices is simply the type of house that has been selling. For years, distress properties defined the market, with foreclosures and short sales accounting for more than half of all sales in the Orlando Realtors’ core market, which consists mostly of Orange and Seminole counties.

But by May, the market had shifted so much that distress sales accounted for only 40 percent of the month’s closings. That decline in sales of “underwater” homes meant that those lower-priced properties were less of a drag on the area’s median sales price.

“The relative good news about inventory is that there was a 10 percent increase in the number of new listings that came on the market in May, the majority – 65 percent – of which were ‘normal’ sales,” said Steve Merchant, chairman of the Orlando Regional Realtor Association and the broker-owner of Global Realty International Inc. in Orlando.

The faster the market works through its supply of distress properties, the sooner prices overall will reflect the value of conventional properties. Last month, the median price of the conventional deals was $180,000 – more than $30,000 higher than the median paid for the underwater houses, which sold for a discount.

According to Smith, the gap between current prices being paid for conventional homes and estimates of where those prices would have been had never been a bubble remains wide – a difference of about $53,000, according to his calculations.

May’s price increases did little to deter sales. Members of the Orlando association closed on 2,855 homes last month, an increase of 15.6 percent from a year earlier and 3.1 percent from a month earlier. Single-family home sales rose 17 percent, while condos sales increased 8 percent compared with May 2012. As a result, the supply of homes available for purchase was enough to last only 2.55 months at the current pace of sales – less than half what is considered healthy for a market. A month earlier, the area had enough listings to last 2.6 months.

May’s home purchases closed in an average of 68 days – the smallest sales window since August 2006, when the housing market was about at its peak. The homes that sold in April had been on the market an average of 76 days. In contrast, during the Great Recession, in March 2008, Orlando-area houses had sat on the market for an average of 128 days before selling.

The current fast-paced sales environment and slim supply suggest there is room for banks to add more of the region’s many foreclosed properties to the market without tamping down prices, Smith and others said. They have also cautioned, however, that this “shadow inventory” – houses headed to foreclosure or already repossessed by the banks – could soften prices if properties are dumped onto the market too quickly.