What is it with some NE Florida home Sales?

[ShokWaveRider]

Seems virtually every home in our general area, that are in decent developments, that were for sale are now pending or contingent. A lot of these homes are > $750k and >$1m, at least in our subdivision.

Some have not been on the market for more than 1 - 4 weeks. Is this the start of another RE bubble?

Seems odd that during a Pandemic home buying would increase. What is your area like?

 

[Aerides]

It's been like this for most of the past year. People who live in smaller places are getting bigger ones now that they see what "stay at home" really means.

Same for the remodel/improvements market - folks staying put are adding pools, redoing kitchens, expanding where they can.

It seems counterintuitive to the economy at-large, but those who could afford homes to begin with aren't as hard hit as those who couldn't. So those that can are upgrading their digs.

 

[Samething]

Seems virtually every home in our general area, that are in decent developments, that were for sale are now pending or contingent. A lot of these homes are > $750k and >$1m, at least in our subdivision.



Some have not been on the market for more than 1 - 4 weeks. Is this the start of another RE bubble?



Seems odd that during a Pandemic home buying would increase. What is your area like?

It’s crazy here in central Florida. Homes here rarely stay on the market for more than a few days. I’m wanting to relocate to the east coast of Florida and that market is nuts too. Very low inventory and inflated prices. When my agent sends me a listing if I don’t go down that day (a 3 1/2 drive each way) it’s gone by the next morning. Can’t find anything that I want to buy. I have reasons I want to move now but might have to wait for awhile.

 

[Djwil296]

We are making the move to Florida next month. We started out house hunting 5-6 months ago online. Was almost impossible as everything seemed to sell faster than we could plan a trip. We finally made a trip down and spent the week focusing on the neighborhood we wanted. Found one that fit our needs and below our budget so we made an offer. I think the record low interest rates are driving the sales.

 

[ivinsfan]

The other side of that coin is the explosion of motor home and camper sales. Toss in lower interest rates and it gets interesting.

Also have some recent current and ongoing events of 2020 led people to decide they no longer want to live in huge cities or certain states? Florida is a major relocation state for lots of reasons. SWR do you have any inkling of where these buyers are coming from? Instate or outstate? And finally for every buyer there is a seller. Where are the seller in your area going?

In MN everything seems to be trending up strongly, except for the luxury apartments in the central downtown MSP area. Part of it from the issues last Spring and part of it is a glut of new building that came online this year.

 

[ShokWaveRider]

SWR do you have any inkling of where these buyers are coming from? Instate or outstate? And finally for every buyer there is a seller. Where are the seller in your area going?

I do not have much info here, a lot of buyers are from out of state I am sure. Where they are going? A couple of sellers I know have moved to local retirement communities.

Our community is multi generational, 600 SF Homes, Gated with a very well managed HOA with great reserves. It has a private golf club within the gates that does not demand all residents become members. We are not. That may attract folks that like exclusivity, but I would not know. I do know membership is not cheap, especially if one does not live in the community (Residents do not need to pay an initiation fee, or at least I think they have specials where this perk is offered). But there are way more non resident members than residents. My Neighbor is a member and told me. I sometimes go to the clubhouse with him, but that is about it.

 

[38Chevy454]

I think it is happening all across the country, not just an isolated FL market occurrence. I agree with Aerides about many people upgrading to larger homes or improving their current house. Here in OH my neighbor was inquiring late summer 2020 about putting in an inground pool, he was told it would be 2022 before it could be done as the contractors were already booked out for 2021. Not to mention that new construction is going full speed around here as well. Guess it is a good time to be in the building trades for now.

As to the question of is it a bubble? Well house sales certainly seems to have climbed faster and higher cost than normal. That indicates a bubble. But I am not sure that bubble will crash down like 2008. Current low interest rates make it easier for people to move to larger or upgrade their current house. I don't see rates changing very fast. There could very well be some pullback in demand if the economy slows down for the (as Aerides also mentioned) people with money. They are the ones driving the housing and construction market.

 

[Montecfo]

The ability to work remotely and desire to have "safe" spaces to go to during pandemic is creating higher demand in suburban and desirable coastal areas. I think stock market gains have motivated folks to pull the trigger on long considered housing purchases.

Housing starts have been depressed also, only recently hitting levels of more than a decade ago. So inventories are low.

We live in one of the more distant DC suburbs and have seen prices rising at 2-3 times the normal rate.

However, demand in cities is falling in some areas so it is a mixed bag.

Housing affordability is historically high due to accelerated HH income growth in the past few years combined with low interest rates. Mortgage underwriting remains constrained due to past mistakes and due to Covid. From that perspective we do not appear to be in a bubble.

A bubble could develop if underwriting is relaxed, but I do not see that presently. Affordability is the key metric, not pricing.

 

[MichaelB]

The data shows sales for full year 2020 were about 6% above 2019. By year end, the monthly rate was about 20% higher YoY, so growth will probably pick up in 2021.

Inventory, which is new listings, is down sharply. That usually leads to faster sales and higher prices, which is what we are seeing. This is happening around the county. Two factors that are probably the biggest drivers are very low mortgage rates and a strong job market among upper and upper-middle income earners.

Florida housing data https://media.floridarealtors.org/w...cember-2020-Fla-single-family-data-detail.pdf

Nationwide housing sales data https://www.nar.realtor/research-and-statistics/housing-statistics

 

[ivinsfan]

I forgot to mention the price of lumber is through the roof. It hit an all time high a couple of weeks ago. So whatever new construction is available is going to cost a ton of money.

 

[levindb]

Lot of migration from the northeast

We have seen both sides of this in the last 6 months. While looking for our "forever" home in Hilton Head, things were selling very quickly and we made an offer on a home that had been listed for 1 day. The interest rates and low inventory seem to be the key drivers.

We then decided to sell our rental property and it sold 6 days BEFORE it was listed...realtors could see it online ahead of the general public. The offer was made by a buyer who had not been in the house...nor had their realtor.

The buyer was from New York, and a lot of other homes were being purchased by folks in higher virus density areas that had a lot of living restrictions in place. The time to close was often lengthened because mortgage companies had such a backlog. Anyone who was refinancing was pushed to the end of the line for a while as well.

Hopefully, people are fully qualified to make these home purchases. Things could change dramatically if folks no longer have the income to pay for their new purchase.

 

[Sunset]

I do not have much info here, a lot of buyers are from out of state I am sure. Where they are going? A couple of sellers I know have moved to local retirement communities.

Our community is multi generational, 600 SF Homes, Gated with a very well managed HOA with great reserves. It has a private golf club within the gates that does not demand all residents become members. We are not. That may attract folks that like exclusivity, but I would not know. I do know membership is not cheap, especially if one does not live in the community (Residents do not need to pay an initiation fee, or at least I think they have specials where this perk is offered). But there are way more non resident members than residents. My Neighbor is a member and told me. I sometimes go to the clubhouse with him, but that is about it.

I see the problem.... You make it sound REALLY NICE

 

[ShokWaveRider]

I see the problem.... You make it sound REALLY NICE

I guess it is by comparison to some other developments in the area, but there are also others that are just as nice, being walking distance to the beach probably helps too.

 

[davebarnes]

1. National data are available by reading https://www.calculatedriskblog.com

2. In greater Denver, the median DoM is 6 days—according to https://www.dmarealtors.com

3. In my neighborhood, all new/newer builds start at $700K for townhomes, $900K for duplexes, and $1.3M for single-family detached houses—the DoM is about 5.

 

[Teacher Terry]

Real estate is crazy in Northern Nevada. There’s not many homes on the market and prices are high. Homes sell in a day. My friend moved to concord California and bought her condo online without ever seeing it.

 

[wolf]

Heard, top destinations, for people relocating is, Florida, Tennessee, Texas.
California, (where I live), has a "net" outflow of people.
Reason, Taxes, high cost of living, Quality of life, not business friendly, Political climate.
If I were younger, I'd be gone to. Probably Nevada, Carson City area.

 

[W2R]

I think it is happening all across the country, not just an isolated FL market occurrence.

+1

It's happening here in my neighborhood, too. Houses are priced insanely high, and getting snapped up almost immediately. I guess about half are sold before they even reach the MLS. There isn't much inventory since houses are selling so fast.

But, as Frank says, "We've got to live SOMEPLACE!" So true. No point in selling when we'd just have to spend the profit buying another home at an insanely high price. Besides, we like where we live.

It's fun, though, to watch the local real estate market these days.

 

[sengsational]

Could it have something to do with the slow-down on new construction (lumber and labor disruption to varying degrees)?

 

[jollystomper]

Funny, before I saw this thread I was catching up with a friend who retired from law enforcement and is working part time in real estate. He told me that our county normally has about 1,000 houses for sale, but right now it only has about 150. All of the reasons mentioned above are factors. Everything is selling for above list price. with the number of federal and state government jobs, as well as various contractors/consultants to these governments in this area, there has been minimal income impact and still plenty of folks with higher salaries competing for these houses.

I wonder if new construction is still slow, with the mention of higher materials prices and fewer workers. When I worked as a census taker in August, one day I was assigned to an area of our county that had maybe 2 dozen new home lots or homes under construction. All work seemed to have stopped. For my checking around these were originally planned to be completed and problem occupied by May of last year. I might drive by there to see if anything has changed since August.

 

[skipro33]

Something that is driving up prices in California is the cost to start construction. Construction permit for El Dorado County where I live is around $100,000 to $125,000. This does not include a water meter, which runs around $30,000 for a 3/4" inch line. Water costs about $100 a month depending on landscaping and # of occupants.
In Yavapai County, AZ (Prescott area) the same construction permits are around $12,000 to $15,000.
The price of raw land can also be pretty expensive in California. Where I live it's 5 acre parcels and sell for around $250,000 but may include a water meter.
So, for new construction single family custom home, not a subdivision, a owner/builder has to plunk down $350,000 to $375,000 before pounding even one nail into a board.
Also, property taxes may drive where people are moving and why. California property tax rate is 1% of the home's value and capped to 2% annual increase by law. There are other fees added to the tax bill as well as the basic property taxes; emergency ambulance fees, school bond fees, etc will add up. This is not the place for a first time home buyer. Many first time home buyers are leaving California due to these costs and I'd bet a good amount are heading to Florida, Arizona, Nevada, etc.

 

[ivinsfan]

About fees for building new. We had to replace our well two and a half years ago. The state of MN in it's infinite wisdom added about 11% to the cost of the well with taxes and fees. Because after all, who needs water?

 

[Walt34]

We're seeing it too here in northern WV. A house two doors up from us just sold within a few days of being listed which is unusual. Lots of houses for sale, most of them "pending" on closing and that's unusual too. And for prices we haven't seen since 2007.

 

[REWahoo]

Residential real estate is crazy in my area of TX as well. Something I've never experienced before is a house selling for above asking price, which happened to a neighbor last week. The house was built in 2008, a 2,600 SF, 4 br, 2.5 bath on 8 acres. The seller said they had four offers the first day and signed a contract the following day for $25,000 above list. And their asking price was already $75 - $100,000 more than I thought it should have sold for.

 

[braumeister]

We're seeing it too here in northern WV.

Same here in the Cincinnati area. The current average is 18 days on the market.

 

[Golden sunsets]

We live in Southern Maine and this market is also hot. 1/3 of buyers are from out of state. In 2020, prices increased YOY by 15%. Very little on the market. Mostly over ask offers. Lots of people from out of state escaping the Covid ravaged cities to work remotely indefinitely.

Moreover, we live on a street with 16 homes. At least 2/3's of our neighbors, including us, have made major renovations/improvements to our homes in the past 9 months. It's almost comical watching the construction trucks move onto a property and stay for days or weeks.

Definitely a K shaped recovery.