Winter and white pelicans are back
One of my favorite days of the year happened a week ago. I looked out in the morning at a sea of white floating at the mouth of Palma Sola Bay. The white pelicans were back – always a promise of cooler weather, holiday lights and an active real estate sales season. This year, however, increased real estate activity didn’t wait for the white pelicans to appear, at least not in Florida.
On Nov. 20, the National Association of Realtors reported existing home sales declined 3.2 percent in October. This is the second straight month that previously owned home sales slipped possibly a sign that higher interest rates are cooling the housing market.
The national market started to weaken in July when rates for a 30-year, fixed-rate mortgage jumped in June and stayed near 4.5 percent through mid-September. As a comparison, a year ago buyers were securing a rate of 3.4 percent for the same type of loan. Every percentage point increase in mortgage interest rates makes homes about 10 percent more expensive for buyers by increasing monthly mortgage payments. In spite of a downturn in sales, the national median price of existing homes increased 12.8 percent from a year earlier to $199,500.
Southwest Florida, however, is ahead of the national market, rebounding to a level not seen since the market’s historic boom a decade ago. October sales did well in spite of rising interest rates, tight inventory and cancelled contracts because of the three week federal shutdown. It appears that the seasonal retirees are back, and they started a little earlier than normal. With mortgage rates leveling off, even more buyers are expected to take the plunge during the active winter months.
Manatee County’s October numbers are also very good. Closed single family homes had an 18.4 percent increase from October 2012, with the median sale price up 14.1 percent to $215,000 for the same period. New listings were down 2.1 percent, which supports the lack of inventory many buyers are experiencing.
Manatee’s townhouse and condo sales did even better in October, with a 21.7 percent increase in sales and a 25.1 percent increase in median sale price to $125,050. New listings were also down by 10 percent from October of last year.
One really interesting number was the increase in cash sales from last year. Single family home cash sales increased 2.1 percent, but townhouse and condo sales increased 31.9 percent pointing to those seasonal retirees coming down with pockets full of cash. All of these statistics were produced by Florida Realtors with data provided by Florida’s multiple listing services.
So that’s all the good news; now for the bad. By now everyone on Anna Maria and indeed everyone who lives in a flood zone in Manatee County are aware of the changes in FEMA’s flood insurance rates. Last year’s legislation was an attempt to curb taxpayer subsidized flood insurance rates, which benefit a relatively small group of people in the country.
But the affects of the extraordinary increases in premiums has hit homeowners so hard that representatives in Congress and the Senate are proposing changes and/or delays to the implementation of the programs. So far, however, the leaders of the House Financial Services Committee are standing behind last year’s bipartisan legislation. Now would be a good time for coastal homeowners to contact their local legislators to express your opinion and relay personal experiences related to premium increases.
At this point, the real estate market in coastal Florida is a mixed bag. The good is that the overall market has improved significantly; the bad is yet to be determined. Never-the-less, the white pelicans have arrived, which always brings a smile to my face.