It was “touch and go” this afternoon with island internet service following a couple of big bands of thunderstorms both last night and this morning which knocked service out. One of our teammates even made a mad dash out of the office yesterday afternoon when Lee County Schools cancelled “after care” for the first time, due to tornado warnings. Luckily, there were none, but the storm was probably a precursor to the upcoming rainy season.
After a week of pretty terrific pre-summer weather and beautiful beach days, the Easter week visitors were probably disappointed with the rain for a few hours. The sun is starting to peek out now and great weekend weather is expected.
Most accommodations were near-capacity this week, but with tomorrow’s check-outs and -ins, occupancy bounces down to about 75%. A higher check-in week is expected again on April 13 when some northern schools are on spring break.
Before the real estate report of the activity posted this week in the Sanibel and Captiva Multiple Listing Service, here is an update on Sanibel sales so far this year, compared to the last two years. Home sales, particularly, continue to improve. It’s been a long time since we have had over a hundred homes sold this early in the year.
CONDOS HOMES LOTS
No. Avg Price No. Avg Price No. Avg Price
Currently for Sale 177 $727,189 196 $1,276,040 90 $530,100
Closings Pending 27 $586,904 55 $1,024,822 3 $479,333
Sold 1/1-4/5/2013 33 $489,906 50 $932,640 5 $707,750
Sold 1/1-4/5/2012 42 $633,707 56 $770,000 11 $518,818
Sold 1/1-4/5/2011 42 $676,541 52 $764,187 5 $299,500
Hooray for Realtor® Education
As 2013 Chairman of the Sanibel & Captiva Islands Association of Realtors® Professional Development Committee, it sure felt good yesterday to receive a thank you from a colleague about the presentation arranged by the committee for our Membership Meeting last month. It made me think that condominium owners and prospective buyers may not be aware of the same educational tidbit that earned that recognition.
As background, the Professional Development Committee is responsible for providing training and education to our members, including finding the speakers for our Monthly Membership meetings. Last fall we had our affiliate members in the insurance business talk to us about the changes that occurred last year with wind, flood, and homeowners insurance. Since that event was so informative, we decided to further feature other business partners in similar panel discussions throughout 2013. In February, we heard a panel of local bankers and mortgage officers speak about recent changes in lending requirements and advise on some creative ways for island buyers to get financing. In March, a panel of affiliate real estate attorneys provided recommendations on how to avoid some of the problems that they have encountered with real estate transactions.
The comment that earned the kudos was one where teammate Lisa’s Dad, local attorney Tim Murty, advised about recent changes to the Florida Condominium Association Addendum. That addendum requires that the Seller to disclose to the Buyer any information about any and all condominium fees. It specifically says, “Seller represents that he/she is not aware of any pending special or other assessment that has been levied by the Association, except as follows….Seller represents that he/she is not aware of any special or other assessment that has been an item on the agenda or reported in the minutes of the Association within 12 months before Effective Date (“Pending”) except as follows….If special or other assessments, levied or Pending, exist as of Effective Date and have not been disclosed above by Seller, then Seller will pay such assessments in full before or at Closing.”
The Realtor® who heard the presentation was working with a condo buyer who had already reviewed that association’s financial documents including current budget. They had not, however, seen the minutes from the association’s recent meetings. When they did, they found that in addition to a large special assessment for the current year, there was another equally large assessment that had been discussed but delayed until the following year. Hearing this panel discussion saved the Buyer thousands of dollars because the Seller was responsible for both of these assessments.
Captiva Beach Project Gets Go Ahead
The beach-building season is winding down in Southwest Florida since sea turtles will begin nesting here in a few weeks, but government agencies charged with shoreline upkeep and protecting developed lands and communities from storm impacts are already working toward the fall.
According to an article posted on News-Press.com and other local papers this week, “Captiva Island‘s ailing and ebbing beach will get a nearly $8 million boost this year when the U.S. Army Corps of Engineers constructs 4.8 miles of revamped shoreline on the affluent barrier island…Construction is to begin on August 1 and is expected to be completed by the end of this calendar year, according to the Captiva Erosion Prevention District, which requested the federal funding. Captiva’s beach was last rebuilt in 2006…”Timing is everything, and the Corps’ willingness to move this project along with allow construction to take place before the peak hurricane season and outside the busy tourist season,” said Jim Boyle, Captiva Erosion Prevention District chair…The CEPD is a nonprofit taxing district focused on retaining the island’s shorelines. Not only are beaches the No. 1 tourism attraction in the state, but they protect the mainland as well as islands and development from tropical storms and hurricanes. Sand bars off the beach cause waves to break before they get to the shoreline, which lessens the size of the waves and their impact on the beach.
“We’re still going to fund a portion of (the Captiva renourishment), but if the Army Corps hadn’t initiated the erosion project, the CEPD would have had to,” said Justin McBride, Lee County’s project manager for the Blind Pass projects. Beach construction work is sometimes ongoing in Southwest Florida as several areas in Lee and Collier counties are on a five-year build schedule, although severe erosion can force agencies to shorten that time frame.
“A beach renourishment and dredging project is under way at the south end of Captiva at Blind Pass. The county is now working to deepen the pass, which will allow salty ocean waters to merge with fresher water in Pine Island Sound. This water mixture is the basis for coastal estuaries, which are breeding grounds for fish, crustaceans and even wading birds and pelicans.”
Real Estate Question & Answer
The answer is “four” – Florida, California, Texas, and Arizona.
(From NAR profile of International Home Buyer Activity 2012)
Some Buyers Snap Up Retirement Homes Early
An article posted last week in “Daily Real Estate News” echoes what we are seeing with Sanibel and Captiva Islands real estate.
“With home values falling over the past few years, some buyers are seeing a great opportunity to buy their retirement home now instead of waiting until they retire years later. For example, in one of the largest retirement areas in the nation — Century Village in Boca Raton, FL — the average age of a new home buyer has dropped from the mid-70s to the low 60s in the last year…”People are looking at this in terms of their long term future,” Ben Schachter with Century Village Real Estate Inc. told CNBC. “They recognize that with the time value of money they are better off investing now, taking advantage of 20, 40, $60,000 price points, because if they look back just a half a decade ago, prices were 3-4 times what they are now. They’re looking at the market as it increases, as the economy is strengthening, and they want to buy now while it’s the best opportunity to do so.” Younger investors also may even rent out the property until they need it years later for their own retirement.”
Tax Deal Extends 15-Year Leasehold Recovery
“Like it or hate it, the American Taxpayer Relief Act of 2012, also known as the “fiscal cliff fix”, does have some real pluses for commercial real estate investors. Perhaps the most beneficial is the reinstatement of the 15-year recovery period for leasehold improvements. The ability to depreciate tenant improvements on a straight-line basis over 15 years expired in 2011. The new act extends it through 2013 and makes it retroactive to 2012. Other provisions that might help commercial real estate investors and practitioners:
• Mortgage debt forgiveness, to a maximum of $2 million, is extended through 2013.
• Capital gains remain at 15% for single taxpayers earning under $400,000, $450,000 for couples. Make more and you have to pay 20% on gains.
• The Alternative Minimum Tax exemption amount has been raised to $50,600 for singles and $78,750 for married couples. Plus, the AMT is now indexed to inflation.
• The state tax exemption remained at $5 million and was indexed for inflation.
• Expensing of capital equipment (Section 179) is increased to $500 million with a $2 million threshold for both 2012 and 2013.
• The 50% bonus depreciation is extended through 2013 on new equipment acquired for business use.
Update on Sanibel’s Neglected Property Ordinance
Last week several island newspapers reported on a revised version of Sanibel’s proposed neglected property ordinance. Last October, the ordinance was first suggested by the Planning Department and a draft proposal submitted to City Council. Council removed vegetation and landscaping provisions before directing planners to modify and continue the ordinance-approval process. City staff presented their revised recommendations on March 26. The ordinance is intended to provide a way to manage structures that have fallen into disrepair because they have been abandoned, foreclosed on, or otherwise sit vacant. It will provide a way to deal with complaints submitted by neighbors through enforcement, abatement (repairs) and appeals. The ordinance is designed to cover the exterior appearance of structures as well as building security. Security issue would only come into play if a property is neglected and abandoned for more than 30 days. City Planning was directed to continue the process and bring the ordinance back to commissioners in resolution form.
2012 Vacation Home Sales Up, Investment Dips but Stays Elevated, Prices Rise
Vacation home sales improved in 2012, while investment purchases remained elevated for a second consecutive year, according to the National Association of Realtors® (NAR).
“NAR’s 2013 Investment and Vacation Home Buyers Survey,* covering existing- and new-home transactions in 2012, shows vacation-home sales rose 10.1% to 553,000 from 502,000 in 2011. Investment-home sales declined 2.1% to 1.21 million from 1.23 million in 2011, but those sales had been well under a million during the market downturn. Owner-occupied purchases jumped 17.4% to 3.27 million last year from 2.79 million in 2011.
“Vacation-home sales accounted for 11% of all transactions last year, unchanged from 2011, while the portion of investment sales was 24% in 2012, down from 27% in 2011, marking the second highest share since 2005.
“NAR Chief Economist Lawrence Yun said favorable conditions are driving second-home sales. “We had a strong stock market recovery, which helps more people in the prime ages for buying vacation homes. Attractively priced recreational property is also a big draw,” he said. Yun notes an ongoing investor presence. “Investors have been very active in the market over the past two years, attracted mostly by discounted foreclosures that could be quickly turned into profitable rentals,” he said. “With rising prices and limited inventory, notably in the low price ranges, investors are likely to step back in coming years.” The median investment-home price was $115,000 in 2012, up 15.0% from $100,000 in 2011, while the median vacation-home price was $150,000, compared with $121,300 in 2011, reflecting a greater number of more expensive recreational property sales in 2012.
“All-cash purchases remain common in the investment- and vacation-home market: half of investment buyers paid cash in 2012, as did 46% of vacation-home buyers. Forty-seven percent of investment homes purchased in 2012 were distressed homes, as were 35% of vacation homes.
“Of buyers who financed their purchase with a mortgage in 2012, large down-payments remain typical. The median down-payment for both investment- and vacation-home buyers was 27%, the same as in 2011.
Investment-home buyers in 2012 had a median age of 45, earned $85,700 and bought a home that was relatively close to their primary residence – a median distance of 21 miles, although 29% were more than 100 miles away. Thirty-five percent of investment buyers purchased more than one property.
““Property flipping modestly increased in 2012,” Yun said. “However, this isn’t flipping in the sense of what took place during the housing boom. Rather, investors generally are renovating and improving properties before placing them back on the market to resell at a profit.” Six percent of homes purchased by investment buyers last year have already been resold, and another 8% are planned to be sold within a year. In the 2011 study, 5% of investment homes were already resold, and 8% were planned to be sold within a year. Overall, investment buyers plan to hold the property for a median of 8 years, up from 5 years in 2011.
“Seventy-eight percent of all second-home buyers said it was a good time to buy, compared with 68% of primary residence buyers. “This suggests that second-home buyers tend to be a step ahead of general buyers in sensing a market recovery,” Yun said. The typical vacation-home buyer was 47 years old, had a median household income of $92,100 and purchased a property that was a median distance of 435 miles from their primary residence; 34% of vacation homes were within 100 miles and 46% were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years. Lifestyle factors remain the primary motivation for vacation-home buyers, while rental income is the main factor in investment purchases.
“Buyers listed many reasons buyers for purchasing a vacation home: 80% want to use the property for vacations or as a family retreat, 27% plan to use it as a primary residence in the future, 23% plan to rent to others and 23% wanted to diversify their investments or saw a good investment opportunity. Fifty-five percent of investment buyers said they purchased for rental income, 30% wanted to diversify their investments or saw a good investment opportunity, and 20% wanted to use the home for vacations or as a family retreat. Eleven percent of vacation buyers and 16% of investment buyers purchased the property for a family member, friend or relative to use, often for a son or daughter to use while attending school.
“Forty-five percent of vacation homes purchased last year were in the South, 25% in the West, 17% in the Northeast and 12% in the Midwest. Thirty-six percent of investment properties purchased last year were in the South, 28% in the West, 20% in the Northeast and 16% in the Midwest. Forty-seven percent of investment buyers said they were likely to purchase another investment property within two years, as did 37% of vacation-home buyers. Twenty-nine percent of vacation buyers said they were likely to purchase another vacation home within two years, as did 31% of investment buyers.
“Approximately 42.8 million people in the U.S. are ages 50-59 – a group that dominated second-home sales in the middle part of the past decade and established records. An additional 43.1 million people are 40-49 years old, which is the prime age for current buyers, while another 40.1 million are 30-39.
“NAR’s analysis of U.S. Census Bureau data shows there are 7.9 million vacation homes and 43.7 million investment units in the U.S., compared with 75.2 million owner-occupied homes…The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries. For additional commentary and consumer information, visit http://www.houselogic.comand http://retradio.com.
“*Vacation homes are recreational property purchased primarily for the buyer’s (or their family’s) personal use, while investment homes are residential property purchased primarily to rent to others, or to hold for other financial or investment purposes.”
Sanibel & Captiva Multiple Listing Service Activity March 29 to April 5, 2013
2 new listings: Spanish Cay #C3 2/2 $349K, Island Beach Club #P3A 2/2 $460K.
1 price change: Sundial #G104 2/2 now $447K.
6 new sales: Ibis at The Sanctuary #B302 2/2 listed for $399K, Sundial #J107 2/2 listed for $497K, Sealoft Village #106 2/2 listed for $499K, Sundial #L202 2/2 listed for $526.8K (short sale), Heron at The Sanctuary III #1B 3/2.5 listed for $589K, Shorewood #1D 3/2 listed for $795K.
6 closed sales: Tennisplace #C33 2/1.5 $235K, Sundial #F105 1/1 $240K, Nutmeg Village #106 2/2 $580K (our buyer), Sundial #K205 2/2 $730K, Gulfside Place #320 2/2 $910K, Junonia #203 3/2 $939.5K.
3 new listings: 1255 Isabel Dr 3/3 $889K, 659 Anchor Dr 3/2 $1.095M, 2520 Harbour Ln 3/2.5 $1.495M.
10 price changes: 3316 Saint Kilda Rd 2/1 now $410K, 9446 Yucca Ct 3/2 now $499K, 3131 Twin Lakes Ln 3/2 now $719K, 4563 Brainard Bayou Rd 3/3 now $730K, 1777 Serenity Ln 5/4.5 now $779K, 1300 Par View Dr 3/2 now $799K, 501 Sea Walk Ct 3/2 now $899K, 657 Birdie View Pt 3/3 now $949K, 512 Periwinkle Way 3/3 now $999K, 4203 Dingman Dr 4/3 now $2.495M.
7 new sales: 1401 Sandpiper Cir 3/2.5 half-duplex listed for $375K, 6069 Henderson Rd 3/2 listed for $395K, 1639 Sand Castle Rd 3/2.5 half-duplex listed for $399K, 1021 Sand Castle Rd 2/2 listed for $429K (short sale), 567 Rabbit Rd 2/2 listed for $485K, 9024 Mockingbird Dr 3/2 listed for $695K, 293 Ferry Landing Dr 3/3 half-duplex listed for $1.175M.
12 closed sales: 754 Donax St 4/2 duplex $420K, 9298 Kincaid Ct 3/2 $440K, 967 Beach Rd 2/2 half-duplex $490K, 1245 Anhinga Ln 3/2 $475K, 1319 Tahiti Dr 3/2 $510K, 3196 Twin Lakes Dr 3/2 $549.9K, 1366 Sand Castle Rd 3/2.5 $630K, 3960 West Gulf Dr 3/2 $659K, 576 Hideaway Ct 3/2 $730K, 765 Conch Ct 5/4 $750K, 1662 Dixie Beach Blvd 3/2 $780K, 4525 Waters Edge Ln 3/3 $2.75M.
1 new listing: 861 Birdie View Pt $369K.
No price changes or new sales.
1 closed sale: Lot 7, West Gulf Dr $935K.
2 new listings: Lands End Village #1631 2/2 $1.35M (foreclosure), Captiva Bay Villas #A 3/3.5 $1.995M.
No price changes.
2 new sales: Beach Villas #2534 3/3 listed for $799K, Beach Homes #11 3/3 listed for $2.28M.
1 closed sale: Tennis Villas #3219 1/1 $198K.
2 new listings: 16849 Captiva Dr 5/5 $2.2M, 4 Sunset Captiva Ln 2/2 $2.395M.
3 price changes: 11517 Wightman Ln 4/3 now $1.795M, 15160 Captiva Dr 6/6.5 now $2.049M, 16428 Captiva Dr 7/8/2 now $10.9M.
No new sales.
1 closed sale: 16163 Captiva Dr 3/2 $1.415M.
1 new listing: 15261 Captiva Dr $3.995M.
No price changes, new or closed sales.
This representation is based in whole or in part on data supplied by the Sanibel & Captiva Islands Association of Realtors or its Multiple Listing Service. Neither the association nor its MLS guarantees or is in any way responsible for its accuracy. Data maintained by the association or its MLS may not reflect all real estate activity in the market. The information provided represents the general real estate activity in the community and does not imply that SanibelSusan Realty Associates is participating or participated in these transactions. If your property currently is listed with another broker, this is not intended as a solicitation of that listing.
Happy spring & here’s to a great weekend
from The SanibelSusan Team
Susan, Dave, Elise, & Lisa