Happy Friday everyone. This week sure has been a mixed bag of weather, traffic, and real estate happenings.
The weather ranged from mostly bright and sunny in the mid-to-high 70’s, to a soggy Wednesday with some much-needed rain. Predictions for the next week are a continuation of this afternoon’s great weather – bright blue skies, lots of sunshine.
The Monday holiday with local schools out resulted in record numbers of on-island day-trippers. By mid-afternoon the back-up coming onto the island was reported to be at a crawl from Shell Point to the 4-way stop. Then, by late day, those visitors all had to go home….so when teammate Elise was ready to head off-island at quitting time, she experienced her new longest-ever journey from the office to the bridges. 1‑1/2 hours from Sanibel Square to Causeway Road (at 5 p.m. to 6:30 p.m.). I was right behind her, also going the “back” way and arriving home on the east-end in just under 1-1/2 hours. Mine was a long, but pleasant 2.9 miles, sun-roof open and happy music playing.
At the Thursday Sanibel & Captiva Islands Association of Realtors’ Caravan Meeting, attendance was light, few sales were announced, and only six properties were open for caravan. What a difference from the preceding week when the room was packed, east-end caravan was full, and lots of price reductions were announced.
We had a reasonable number of showings this week, but not as many as I expected there would be on Presidents’ week. (Maybe the below article posted in yesterday’s Fort Myers “News-Press” provides some insight in that.)
Yesterday, I negotiated an offer on our home listing in Periwinkle Properties, the result of a showing last Saturday. The action posted this week in the Sanibel & Captiva Islands Multiple Listing Service follows a few news items below. Since last Friday, nine Sanibel sales are reported, seven of them homes, and 20 price reductions.
Before the news articles, how about this cute poster that I spotted this morning on Facebook. Prepared by Sanibel Sea School it’s called “20 signs you’re from Sanibel…”
If you are in town, don’t forget the annual Kiwanis Spaghetti dinner tomorrow night (Sat 2/25) at The Community House.
For more than 30 years, this Sanibel event has brought islanders together with a great meal and for a good cause. All funds directly benefit island youth education and recreation. Tickets are just $9 at the door. Can’t beat the price!
Dinner will be served from 4 to 8 p.m., followed by music, raffle, silent and live auctions, music, and fun. Last year 1,400 dinners were served. This year in the newly renovated Community House, it will be extra special.
Market Watch – Real Estate Amid Uncertainty
The Fort Myers “News-Press” on-line posted the following article Feb 22, 2017. It covers the three presentations this week at the annual local real estate event – The News-Press Market Watch:
“Uncertainty was the word of the day as three real estate experts, backed by facts, shared their reflections and predictions on the market at The News-Press Market Watch. The annual event, this time titled “Real Estate Solutions for Uncertain Times,” was held Wednesday evening at Harborside Event Center in Fort Myers.
“Presenters included Randy Thibaut, owner and founder of Land Solutions, who discussed land and new home sales; Denny Grimes, president of Denny Grimes & Company, who focused on existing home sales; and Stan Stouder, founding partner of CRE Consultants, who dealt with commercial real estate.
“Randy Thibaut, CEO, Land Solutions Inc. – “Welcome to Uncertainty 2016,” Thibaut said. “That’s the theme of my presentation. That’s where the meat of the market is. That’s what we’re feeling.” Thibaut referred to surveys that show people held differing views of where the market was in 2015 and 2016. Some thought it was in a boom, others in a bubble, but most didn’t know. “No one had a good feeling on where they thought the market was,” he said. Thibaut discussed the luxury high-rise market from south to north, mentioning three projects in south Naples that are selling well.
““For 10 years, there were no towers built,” he said. “There was pent-up demand for buyers who wanted that luxury project. It was clear there was hunger for luxury product in Naples. We think they’ll sell out.”
“Builders are working on luxury projects in Estero/Bonita Springs and Fort Myers Beach as well. Things start to get more uncertain when looking at downtown Fort Myers, he said, where a number of builders are working to pre-sell units. “They’ve been churning along trying to get enough reservations … but it’s been a much slower go than what we’ve seen in Estero and Naples,” he said. “When you start thinking about 550 luxury units that have to be presold, that’s a lot of units. That’s some stiff competition. I hope this all works out.” The brightest downtown project: The Place on First, partly because it will have only 16 residential units, along with office space.
“Who is buying and who is not? “Millennials are not buying,” he said. “Most of them are living in an apartment, but many of them are living in your second bedroom.” In downtown Fort Myers, he sees two buyer groups: baby boomers and buyers in the workforce who lost their homes in the bust. Some of that will likely be driven by higher interest rates expected to come.
““Baby boomers, there’s tons of them,” he said. “They’ve got money. These folks have been sitting on the sidelines for the most part the past 10 years. Their investment portfolios have been going down. They’ve been cautious. They’ve waited long enough. They’re coming in droves, but the difference is they’re going to be spending less money.”
“Thibaut said builders who develop homes in the $250,000-$300,000 range should be in good shape. Buyers in the workforce who lost homes in the downturn have been forced to rent apartments in many cases: “After five, six years they’ve saved money and got their credit back. These buyers want to get into single-family homes. The question is, is the price right?”
“In 2016, he said the pendulum swung to houses. Buyers can pay $1,500 monthly on a $225,000 home mortgage or rent a nice apartment for the same amount. However, he noted that can change if interest rates rise. “These value oriented builders are after those renters,” he said. “They’re chasing that buyer.” Where are the buyers going to find a home in the $250,000 price range? Northeast Naples, north Cape Coral, Lehigh Acres and east Fort Myers and Charlotte County. Babcock Ranch: “We all are hearing about Babcock Ranch. This is a big, long-term project. Let’s stay tuned next year and the following year to see how it does.”
“Threats and challenges in market: “When 25% of the cost of a new house is regulation, that is a big problem.”
“Denny Grimes, president, Denny Grimes & Company – ““We can’t always see what’s going on,” Grimes said as he took the stage. As evidence, he pointed to the Chicago Cubs ending their championship drought after more than 100 years and Donald Trump being elected president.
“The median price of existing homes in December was $250,000 in Lee County, $450,000 in Collier County and $195,000 in Charlotte County. Last year was the first time he could recall in which Lee’s top home sale eclipsed Collier’s top sale. A home on Captiva was sold for $16.3 million, beating Collier’s standout of $15.15 million.
“The number of homes sold in 2016 was down in Lee and Collier counties: “…Sales are down 7%.” Sales were down in each part of each county (other than Lehigh, up just slightly), with luxury sales and condo sales also down: “You getting the trend here?” he said. “I’m calling 2015 a peak year, because we are seeing sales drop.”
“Median home prices were up 10% in Lee and 7% in Collier in 2016: “There’s always more to the story.” Still, because of fluctuations, he said prices are basically flat.
“Takeaways: slowing sales plus rising inventory has led to slower price growth: “This is how a rational market is supposed to react. Tell your buyers they can proceed with confidence. No crash. No bubble. It’s fine.”
“Grimes implored agents to take note of the market myth that “season” is the best time to sell: “It kills me to hear that because it’s not true. People, because of the internet can shop year-‘round and they do.”
“Downtown Fort Myers: “The success of downtown is going to be based on condos … downtown has a vibrant yet narrow niche. There is little investment opportunity. There, it’s a user-driven market. Less inventory is better than too much. Bottom line: smaller is better.” “Millennials or baby boomers in downtown? “I’m a boomers fan. We need people living here with money. That fills that need. It grows the market.”
“Grimes, who has lived in the Fort Myers area more than 50 years, talked of the “edge of the canvas theory.” As Edison Mall was once on the edge of town, that’s how Babcock Ranch is perceived today. “Babcock’s going to stretch the canvas,” he said. “It will happen. It will not happen as fast as some hope.” Grimes said there’s investment opportunity in what he called the market’s sweet spot. In Lee, that’s less than $300,000; in Collier, it’s less than $500,000.
“Look forward: “The over-optimistic national headlines will be misleading. Affordability is going to be squeezed. Buy sooner, not later.”
“Stan Stouder, founding partner, CRE Consultants – Stouder’s presentation focused on what was, what is and what’s next. “Apartments were pulling the market in 2015, but that segment saw a 86% decline last year in the number of those units permitted. What’s next? “The apartment market will continue to cool.”
“Stouder touched on the “Trump effect” as the country elected Trump president: “I’m experiencing this in my business and not in just some small way.” Business owners, he said, are hopeful that Trump will deliver on campaign promises such as deregulation, tax relief and infrastructure improvements.
“What’s next? “The optimism of the small-business community jumped and more optimism means more spending. It means greater demand for commercial property. We’re finding sellers that are returning to the market that hadn’t been there before.”
“New commercial construction permits in Lee were up 62% in 2016, but the value of those went down 52%. “Why? I can answer that in two words: fewer apartments.”
“Senior housing: at least nine projects are under construction. For example, Campo Felice in downtown Fort Myers is expected to open this summer. It’s about 50% pre-leased. Those behind that project are preparing to do a $45 million sister tower devoted to memory care and medical offices. Another senior housing project called Avida is going up on property near Gladiolus Drive and Summerlin Road. The $95 million project is expected to have 460 units on 32 acres. “Senior housing is to the market of 2016 as apartments were in 2015,” he said.
““Sales of large tracts of land (50 acres and greater) have picked up in the past six months. Why? It’s because so much growth is expected in Florida and because the state is one of only seven without an income tax. What’s next for such land? “Now is the best time since 2006 to sell land.””
Technology Is Changing How Homes Look
The below article was posted on Realtor®Mag on Feb 15, 2017. It is sourced to Forbes.com:
“Technology and smart devices are radically transforming the home. As your clients take control over their houses’ systems via voice activation, dash buttons, and other smart-home technology, Forbes.com asked its Technology Council to offer up some of their predictions on how homes will evolve in the near future.
“Less clutter. Information can be stored in smaller devices, which means fewer file cabinets and the like. Some owners may even opt for much smaller houses due to this trend, says Chalmers Brown with Due.
“Voice-activated interfaces. The voice is expected to drive smart-home technology control over the next five to 10 years. This will make smart homes less complex to operate, says Leon Hounshell with Greenwave Systems.
“Smartphones as the central hub. The smartphone likely will become the remote control to manage all elements of a smart home, says Arash Asli with Yocale. This will include everything from lights to appliances to cooling and heating systems to security and more.
No more control panels. Since the smartphone will become a remote control for many elements of the home, expect fewer panels inside the home, such as thermostats, electronic dials like on washing machines or dishwashers, or even light switches, says Andrew Kucheriavy with Intechnic.”
Homeowner Tax Breaks: It’s Not Just The Property
Tax time always is a good time to remember the tax benefits of home ownership. Posted Tuesday on FloridaRealtors®, this article came from USAToday.com, InvestorPlace.com:
“Owning a property can unlock some of the biggest potential tax breaks most families have access to.
It’s not just the home-related tax breaks you get access to, either, says Lisa Greene-Lewis, a CPA and tax expert for TurboTax. “Getting enough qualified expenses can top the standard deduction and push you over into itemizing and allow you to deduct so many other expenses you wouldn’t be able to otherwise,” she said.
Here are five valuable deductions that you may be able to claim:
“Mortgage interest – The interest paid on a home loan is typically the largest potential deduction for middle-class Americans, Greene-Lewis said. For instance, a 30-year mortgage on a $300,000 loan at current rates will run you more than $12,000 in interest payments your first year. If you own a second home, you can also deduct the mortgage interest on that, as long as it isn’t a rental property.
“Points – If you recently purchased a home but paid “points” to the bank in order to get a better rate, that expense is tax deductible in the year you paid them. A point is typically 1% of your loan amount so, on that $300,000 home, you would get a $3,000 tax break for paying down one point. Points on refinance loans and home equity loans are also deductible but must be spread over the life of the loan instead of all in one year’s return, so those are less lucrative but can still add up.
“Energy credits – “If you make expenditures that improve the energy efficiency of your home, you may qualify for a tax credit,” said Neil Krishnaswamy, a certified financial planner at Exencial Wealth Advisors in Frisco, Texas. “These include items like insulation, windows, doors and roofs.” A tax credit is even better than a deduction, because they are dollar-for-dollar savings instead of simply saving you whatever tax you paid. For instance, if you’re in the 28% tax bracket, then a $1,000 deduction lowers your tax bill only $280, while a credit lowers your tax bill by $1,000 regardless of your effective tax rate. There are limits on energy credits depending on what you purchased, but the dollar-for-dollar savings make them very valuable.
“Property taxes – State taxes levied on your primary residence are deductible, too, and can add up in a hurry depending on where you live. For instance, the Tax Foundation found, in 2015, that New Jersey residents typically pay almost 2.4% in property taxes – almost twice the national average, and about $7,000 on a $300,000 home. Deducting this big local tax bill can save you a lot on your federal return.
“Casualty losses – If you suffered property damage and weren’t reimbursed by an insurance company for repairs, you may be eligible for a big deduction. Your casualty loss deduction must exceed 10% of your adjusted gross income, so don’t bother writing off small-time repairs. But if you incur significant expenses repairing your home after an unfortunate event, document everything and tap into this tax break to ease some of the pain.”
Most Significant Change in FAR/BAR Update? Financing Clause
Written by Marcia Tabak, Deputy General Counsel of Florida Realtors®, and posted on-line at FloridaRealtors® on Monday, this article covers some of the upcoming changes to the Florida sales contracts and is directed toward Realtors®, but it has some good info for sellers too.
“The real estate industry changes, and when it does, the Florida Realtors/Florida Bar contract gets updated.
“The next version of the FloridaRealtors/FloridaBar Residential Contract and its As Is companion debuts April 4, 2017. In the meantime, a redline version of the contract changes (additions in blue, deletions in red) is posted on Florida Realtors’ website along with an explanation of the revisions. Some changes are housekeeping tasks. Some require a bit more study, and a future article will focus on those. For now, however, the new version of Paragraph “8(b) Financing” clause deserves your focus. You need to understand what will change.
“Changes prompted by lending industry – There are several reasons for the financing change, in part because the lending industry itself has changed. The contract no longer mentions “Loan Commitment,” for example, because the lending industry has largely dropped the term. It’s being replaced by the term “Loan Approval,” and the term “Loan Commitment Period” has become “Loan Approval Period.”
“In addition, the default time for “Loan Approval Period” will also change back to 30 days from 45 days. This change was made because loan approvals are no longer being slowed down by TRID (TILA/RESPA Integrated Disclosure Rule), the financial regulations that went into effect in the fall of 2015.
“Finally, a requirement in the current version of the contract – “this contract is contingent upon buyer obtaining a written loan commitment,”– has been changed, and the “written” component has been deleted.
“Change in philosophy regarding buyer’s right to cancel – In general, many members feel parts of the current financing clause are confusing. In particular, Florida Realtors has received many questions about either party’s right to cancel the contract up to seven days prior to closing when a buyer didn’t timely obtain a loan. The new version of the contract scraps this concept in favor of a new approach. As always, the devil is in the details.
“The new financing clause requires a buyer to promptly notify a seller, in writing, when a Loan Approval is obtained. If a buyer does not obtain Loan Approval within the Loan Approval Period, then the buyer may notify the seller – again, in writing – and elect to either terminate the contract or waive Loan Approval. However, the buyer no longer has a unilateral contractual right to terminate the contract for failure to obtain Loan Approval after the Loan Approval Period.
“Further details: If a buyer doesn’t give the seller any kind of written notification during the Loan Approval Period, new language specifies Loan Approval will be considered obtained. This results in the buyer’s deposit being at risk if he fails to close unless the buyer’s failure is caused by items set out in Paragraph 8 (b)(vii).
There is an exception to the contract going forward if a seller has received no written notification at all – either that a loan has been obtained or the buyer cannot get one. The seller may unilaterally cancel the contract by giving buyer written notice within a three-day period after the buyer’s Loan Approval Period has expired. But if the seller does nothing during the three-day period following the Loan Commitment Period, the seller has no further unilateral opportunity to terminate the contract based on the buyer’s failure to obtain Loan Approval or failure to provide the seller a written notice.
“Other highlights of 8(b) Financing clause changes – If the lender requires that a buyer sell an existing property, this will not be considered Loan Approval.
“When applying for a loan, what is a “diligent effort” on the buyer’s part? New language now specifies this requires the buyer to “timely” provide documents, information, payment of fees and charges per lender requirements.
“An additional clause authorizes the closing agent to share the settlement statement and Closing Disclosure with the seller and real estate brokers. Note, however, that this doesn’t obligate the closing agent to share the documents and it might violate the lender’s closing instructions.
“What if the buyer finds that he can’t secure Loan Approval before the Loan Approval Period expires? This caused some confusion in the past, but no longer. A buyer who has used due diligence but is unable to obtain Loan Approval can notify the seller in writing at any time before the Loan Approval Period ends.
“One clause, 8(b)(vii), about returning deposits when a deal doesn’t close because of a lender’s “financial failure” was removed from the new version.”
Sanibel & Captiva Multiple Listing Service Activity February 17-24, 2017
1 new listing: Sundial West #C406 1/1 $475K.
7 price changes: Lighthouse Point #211 2/2 now $659K, Pointe Santo #C36 2/2 now $819K, Nutmeg Village #313 2/2 now $1.099M, High Tide #C101 2/2 now $1.145M, Nutmeg Village #100 2/2 now $1.17M, Somerset #E202 3/2.5 now $1.649M, Tigua Cay #487 3/3.5 now $1.695M.
2 new sales: Sundial West #G307 1/1 listed at $424.9K, Villa Sanibel #3D 2/2 listed at $599K.
2 closed sales: Loggerhead Cay #181 2/2 $689K, Sundial West #K203 2/2 $859K.
6 new listings: 2154 Egret Cir 3/2 $539K, 4221 Gulf Pines Dr 3/2 $589K, 1322 Sand Castle Rd 3/2 $599K, 6081 Henderson Rd 3/2 $849.9K, 750 Tarpon Bay Rd 3/2.5 $875K, 935 Pecten Ct 3/2 $999K.
13 price changes: 1602 Serenity Ln 4/2 now $479,999; 770 Donax St 2/2 now $495K; 1390 Middle Gulf Dr 3/3 half-duplex now $519K; 693 Rabbit Rd 3/2 now $579.9K; 5306 Ladyfinger Lake Rd 3/2 now $599K; 1036 S Yachtsman Dr 3/3 now $624.9K; 2030 Sunrise Cir 3/3 now $679K; 998 Fish Crow Rd 3/2 now $689K; 5299 Ladyfinger Lake Rd 3/3 now $699K; 243 Southwinds Dr 3/2.5 now $865K; 3386 West Gulf Dr 3/3.5 now $1.2977M; 687 Anchor Dr 4/3 now $1.695M, 6192 Henderson Rd 4/4 now $1,999,999.
7 new sales: 702 Durion Ct 3/2 listed at $649.9K, 1252 Sand Castle Rd 3/2 listed at $659K, 2010 Sunrise Circle 5/3 listed at $799K (our listing), 1174 Harbour Cottage Ct 3/3 half-duplex listed at $1.05M, 918 Lindgren Blvd 3/3.5 listed at $1.199M, 6129 Starling Way 3/2.5 listed at $1.235M, 2143 Starfish Ln 3/3.5 listed at $1.495M.
No closed sales.
No new listings, price changes, or new sales.
2 closed sales: 2379 Wulfert Rd $230K, 497 Sea Oats Dr $475K.
1 new listing: Marina Villas #908 2/2 $799K.
No price changes.
2 new sales: Tennis Villas #3111 1/1 listed at $259K, Gulf Beach Villas #2004 2/2 listed at $619K.
1 closed sale: Bayside Villas #5316 3/3 $590K.
No new listings.
2 price changes: 1114 Schefflera Ct 4/3.5 now $3M, 16979 Captiva Dr 7/6/1 now $3.998M.
2 new sales: 16910 Captiva Dr 4/4 listed at $4.295M, 16560 Captiva Dr 7/7.5 listed at $6.5M.
No closed sales.
Nothing to report.
(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 general real estate activity in the community and does not imply that SanibelSusan Realty Associates is participating or participated in these transactions.)
Best wishes for a great weekend! If you are looking to buy or sell on the islands, please call us at 239-472-HOME (4663).
Susan Andrews aka SanibelSusan
or we can keep an “eye” out for the property that meets your needs…