Sarasota Real Estate Blog and Information

Real Estate Report June 2010

By Michael Moulton on July 8, 2010

The following statistical data is from information provided through the Multiple Listing Service of the Sarasota Association of Realtors. The following table summarizes what happened in each price segment. The Sold M, Pend M (Pending) and List M (Listings) columns are new transactions that happened during the month and the Pending, not yet closed and Listed are the totals of each in the MLS system. The Sold column is the total sales for 2010 year to date.

Houses	Sold M	Sold	Pend M	Pend	List M	List	Sold ‘09
&$250,000 & under	326	1772	305	884	297	1387	3055
$250,000 to $500,000	129	580	98	266	142	807	958
$500,000 to $750,000	28	141	27	66	34	343	273
$750,000 to $1,000,000	11	69	7	35	21	222	87
$1,000,000 to $2,000,000	6	64	13	32	30	314	106
$2,000,000 & above	3	24	2	14	9	222	43
Totals	503	2650	452	1297	533	3295	4522

Condominiums	Sold M	Sold	Pend M	Pend	List M	List	Sold ‘09
&$250,000 & under	159	929	145	446	165	1152	1431
$250,000 to $500,000	47	299	33	81	78	704	474
$500,000 to $750,000	11	108	11	27	20	310	163
$750,000 to $1,000,000	7	42	3	10	10	123	65
$1,000,000 to $2,000,000	6	43	1	9	8	140	60
$2,000,000 & above	1	14	1	2	4	66	20
Totals	231	1435	194	575	285	2495	2213

Grand Totals	734	4085	646	1872	818	5790	6735

69% of the months sales were single family homes and 31% were condominiums. Of the total sales 66% were properties that sold for $250,000 or less, 24% were sold for between $250,000 and $500,000, 8% sold for between $500,000 and $1,000,000 and 2% sold for over $1,000,000. The current listing inventory is 5% less then where it was at the end of 2009.

As the statistics relate to listed properties vs. sold properties we have 12 months of inventory overall based on the June closings. Based on the June closings there is only 6 months of inventory for properties listed under $500,000 compared with 10 months at the beginning of 2010, in the price bracket of $500,000 to $1,000,000 there is 17 months of inventory down from 22 months at the end of 2009 and over $1,000,000 there is 46 months of inventory based on the June closed sales. The months of available inventory does vary greatly on a month to month basis based on that months closed sales. Six months of inventory is considered a neutral market meaning it is neither a buyers or sellers market.

Posted in General

Real Estate Report May 2010

By Michael Moulton on June 19, 2010

Houses	Sold M	Sold	Pend M	Pend	List M	List	Sold ‘09
&$250,000 & under	301	1486	296	999	245	1299	3055
$250,000 to $500,000	112	474	114	320	122	819	958
$500,000 to $750,000	23	118	27	78	43	354	273
$750,000 to $1,000,000	13	60	16	45	19	224	87
$1,000,000 to $2,000,000	16	58	9	33	29	330	106
$2,000,000 & above	8	20	6	18	11	234	43
Totals	473	2216	468	1493	469	3260	4522

Condominiums	Sold M	Sold	Pend M	Pend	List M	List	Sold ‘09
&$250,000 & under	172	803	143	491	166	1208	1431
$250,000 to $500,000	62	261	41	102	77	712	474
$500,000 to $750,000	18	98	6	31	17	325	163
$750,000 to $1,000,000	10	38	3	13	15	124	65
$1,000,000 to $2,000,000	9	34	7	17	15	147	60
$2,000,000 & above	2	14	1	1	3	70	20
Totals	273	1248	201	655	293	2586	2213

Grand Totals	746	3464	699	2148	762	5846	6124

63% of the months sales were single family homes and 37% were condominiums. Of the total sales 63% were properties that sold for $250,000 or less, 23% were sold for between $250,000 and $500,000, 9% sold for between $500,000 and $1,000,000 and 5% sold for over $1,000,000. The overall listing inventory is 10% less then where it was at the end of 2009.

As the statistics relate to listed properties vs. sold properties we have 12 months of inventory overall based on the May closings. 2009 ended with 10.1 months of listing inventory. Based on the May closings there is only 5.3 months of inventory for properties listed under $500,000 compared with 10 months at the beginning of 2010, in the price bracket of $500,000 to $1,000,000 there is 16 months of inventory down from 22 months at the end of 2009 and over $1,000,000 there is 22 months of inventory vs. 45 months at the end of 2009 based on April 2010 closed sales. Six months of inventory is considered a neutral market meaning it is neither a buyers or sellers market.

Posted in General

10 Things to Know Before Buying A Home

By Michael Moulton on June 15, 2010

The decision to buy a home seldom comes overnight—indeed, even seasoned investors think long and hard before putting money into real estate. For most people, it’s the single most important investment they’ll ever make. So it’s only natural, even practical, to get informed before taking that step. Here are ten things worth knowing if you want to get your money’s worth.

1. Are you ready to settle?

One sign that you’re ready to own a home is if you can see yourself staying in one place for more than a couple of years. Less than that, it’s seldom worth the trouble (and transaction costs) of reselling and moving out again. Even if the market were doing better, you’ll only lose money by buying a home when you can’t stay put just yet.

2. How’s your credit?

You’ll most likely need a mortgage to buy your home. To get the best deals, you need good credit—it’s the banks’ way of knowing how likely you are to keep up with payments. Start by getting copies of our credit report and double-checking the facts. Do this at least a few months before house-hunting so you’ll have time to fix any problems.

3. How much can you afford?

As a general rule, you should aim for a house worth two and a half times your annual income. If you’re making $100,000, you can probably comfortably afford a $250,000 home. Of course, there are other factors to take into account, such as your debts and other monthly expenses. Try talking to a financial adviser to set a more precise budget.

4. Can you afford the down payment?

Aim for a down payment of at least 20 percent of the home’s value. This will get you prime rates and terms at most major banks. You can still get financing with less—some banks will accept as little as 3 percent—but the more you can put down, the better.

5. How’s the neighborhood?

Experts recommend buying in a district with good schools, even if you don’t have school-age kids. Historically, areas with a strong educational community tend to have higher property values. This gives you solid equity for when you need to refinance, and ensures a decent profit when you need to resell later on.

6. Do you have an agent?

A professional agent can help whether you’re buying your first home or your fifth. It’s not just about getting access to listings; a good agent can also help you arrange for financing, negotiate with sellers, and plan the move. Look for an exclusive buyer’s agent—they won’t be limited to certain sellers and can give you smart bidding strategies.

7. Do you want to buy points?

A point is a small portion of the interest (usually 1% of the value) that you can pay up front in exchange for a lower interest rate. It helps the lenders stay liquid and, if you stay in the home long enough, will save you money in the long run. Sit down with your agent and decide whether or not the points are worth taking.

8. Are you pre-approved?

Getting pre-approved is becoming more or less standard in home buying—some sellers won’t even look at offers that don’t come with pre-approval letters. It also saves you the trouble of looking at homes you can’t afford, since you know at the outset what your limits are. Don’t get it confused with pre-qualification: a pre-qualification is just a quick assessment of your finances, while a pre-approval takes into account such factors as debt, income, and credit history.

9. What’s the market like?

You need a good grasp of the local market if you want to make a reasonable bid. Your agent can give you a comparative market analysis of recently sold homes similar to the one you’re buying, which you can use as a benchmark for your offer. For example, if similar homes have sold for 5 percent lower than the listed price, you should bit at about 8 to 10 percent lower to give yourself negotiating room.

10. What condition is the home in?

Most lenders will require a home appraisal, but that’s mostly to make sure the home is worth what you’re paying for it. A professional home inspection will reveal any problems in construction, wiring, and piping, which could cost you thousands later on. Inspectors should also issue home insurance, which will keep you covered in case they overlook something that causes problems down the road.

Posted in Tips for Home Buyers | Tagged buying a house, home buyers, real estate

10 Common Real Estate Investing Mistakes

By Michael Moulton on June 13, 2010

The slow but steady rebound of the housing market has brought about a rise in real estate investing. But investing in property is no easy business, although the dozens of money gurus on the Internet would tell you otherwise. There is a right way to go about it—it’s just a matter of finding it while avoiding the many pitfalls. Here are ten of the most common real estate investing mistakes and how you can avoid them.

Not having a game plan

Atlanta-based investor Andy Heller says many new investors take the plunge without a plan: they snap up good deal, then don’t know what to do with it. Eventually they’ll end up with a number of properties just gathering dust. Your first step should be choosing your strategy, then finding a home that fits it.

Expecting returns overnight

What the Internet ads don’t tell you is that a lot of work, time, and money goes into real estate. For your cash to work for you, you need to make smart decisions, develop negotiation strategies, and understand the risks of the business. It takes time, but with good direction, it’ll start paying off eventually.

Working alone

If you think real estate agents are just for first-time buyers, think again. A good network is part of any successful investor’s arsenal, both for buying his own properties and selling them off. Build strong relations with professionals in the field. Ideally, you should be on good terms with at least one realtor, a lender, a home inspector, an appraiser, and a closing attorney.

Over-valuing properties

The idea is simple: you buy a property, then you sell it off for a profit. So the point is to not pay too much for a home—but according to Heller, that’s what a lot of new investors do. Take the time you need to analyze the value of a home—how much it’s worth, what improvements will be needed—before putting your money into it.

Not doing research

First-time investors are often taken aback by the complexities of the real estate business, and this often leads to costly mistakes. Start by joining a National Real Estate Investors Association (REIA) chapter in your area. The monthly meetings touch on a wide range of topics, from buying short sales and foreclosures to leasing issues.

Counting on appreciation

A lot of buyers snapped up properties during the housing boom, thinking they can make quick profits given the strong seller’s market. But the ensuing crash taught them a hard lesson. There’s no telling where the market will go, but with sufficient research and smart analysis, you can lower your risk and find other ways to make proft.

Miscalculating costs

There’s a lot more to home ownership than the asking price. Mortgage, insurance, and property taxes add up over time. And since it takes time to lease or sell a home in today’s market, you’ll be paying them out of your own pocket for a good while. If you’re not prepared, what started out as an asset will become a liability before you know it.

Focusing on single deals

It takes more than one deal at a time to run a real estate investing business. Besides, you miss out on many opportunities by limiting your volume. Build a steady stream of prospects; with enough deals on the horizon, the good ones will naturally come to the fore.

Not having an exit strategy

So you have a plan, but what if it doesn’t work out? Make sure you have at least two backup plans so you don’t get stuck with a property. Plan A might be to work on the home before reselling it. If the market is slow, Plan B could be a lease-purchase offer. And if that doesn’t work out, you can either just rent it out. The profits may be lower with succeeding plans, but it’s better than losing money by simply holding on to it.

Underestimating rehabs

You don’t need an engineering degree to estimate costs, but you do need a good buffer. When you decide to rehab a home, always set aside twice as much time and money as what you would expect it to take—and if you can still make a profit then, it’s worth taking on. This will give you a comfortable cushion against any problems.

Posted in Real Estate Investing | Tagged investment, real estate, Real Estate Investing

Real Estate Report for April 2010

By Michael Moulton on May 19, 2010

Houses	Sold M	Sold	Pend M	Pend	List M	List	Sold ‘09
&$250,000 & under	305	1230	366	876	250	1279	3055
$250,000 to $500,000	103	387	128	295	133	842	958
$500,000 to $750,000	30	100	22	52	44	371	273
$750,000 to $1,000,000	14	49	9	32	23	240	87
$1,000,000 to $2,000,000	9	47	12	27	25	337	106
$2,000,000 & above	4	15	3	13	10	274	43
Totals	465	1828	540	1295	485	3316	4522

Condominiums	Sold M	Sold	Pend M	Pend	List M	List	Sold ‘09
&$250,000 & under	186	670	182	538	176	1176	1431
$250,000 to $500,000	54	550	48	101	109	736	474
$500,000 to $750,000	25	86	15	34	42	328	163
$750,000 to $1,000,000	9	31	9	17	13	39	65
$1,000,000 to $2,000,000	8	32	6	16	76	149	60
$2,000,000 & above	2	12	0	2	2	75	20
Totals	284	1051	260	708	418	2603	2213

Grand Totals	749	2879	800	2003	903	5919	6124

62% of the months sales were single family homes and 38% were condominiums. Of the total sales 66% were properties that sold for $250,000 or less, 21% were sold for between $250,000 and $500,000, 10% sold for between $500,000 and $1,000,000 and 3% sold for over $1,000,000. The overall listing inventory is 3% less then where it was at the end of 2009.

As the statistics relate to listed properties vs. sold properties we have 12.6 months of inventory overall based on the April closings. 2009 ended with 10.1 months of listing inventory. There is only 6.2 months of inventory for properties listed under $500,000 compared with 10 months at the beginning of 2010, in the price bracket of $500,000 to $1,000,000 there is 12.5 months of inventory down from 22 months at the end of 2009 and over $1,000,000 there is 35 months of inventory vs. 45 months at the end of 2009 based on April 2010 closed sales. Six months of inventory is considered a neutral market meaning it is neither a buyers or sellers market.

Posted in General

Real Estate Report for March 2010

By Michael Moulton on April 6, 2010

The following statistical data is from information provided through the Multiple Listing Service of the Sarasota Association of Realtors. The following table summarizes what happened in each price segment. The Sold M, Pend M (Pending) and List M (Listings) columns are new transactions that happened during February 2010 and the Pending and Listed are the totals of each in the MLS system and the Sold column are the total sales for 2010 year to date.

Houses	Sold M	Sold	Pend M	Pend	List M	List	Sold ‘09
&$250,000 & under	332	812	396	1039	283	1297	3055
$250,000 to $500,000	96	234	129	324	159	925	958
$500,000 to $750,000	27	59	29	75	50	384	273
$750,000 to $1,000,000	16	31	23	50	29	235	87
$1,000,000 to $2,000,000	14	33	14	36	37	357	106
$2,000,000 & above	0	11	8	18	22	262	43
Totals	475	1180	599	1542	580	3460	4522

Condominiums	Sold M	Sold	Pend M	Pend	List M	List	Sold ‘09
&$250,000 & under	150	419	192	537	250	1221	1431
$250,000 to $500,000	48	137	47	121	74	644	474
$500,000 to $750,000	22	51	16	39	43	332	163
$750,000 to $1,000,000	11	16	11	20	13	155	65
$1,000,000 to $2,000,000	9	20	11	22	16	145	60
$2,000,000 & above	2	9	1	2	2	85	20
Totals	242	652	278	728	427	2667	2213

Grand Totals	717	1832	877	2270	1007	6127	6124

66% of the months sales were single family homes and 34% were condominiums. Of the total sales 66% were properties that sold for $250,000 or less, 20% were sold for between $250,000 and $500,000, 11% sold for between $500,000 and $1,000,000 and 3% sold for over $1,000,000. The overall listing inventory is equal to where it was at the end of 2009 which when compared with the inventory at the end of February, it has climbed back up.

As the statistics relate to listed properties vs. sold properties we have 11.7 months of inventory overall which is up from February’s 9.5 months. 2009 ended with 2 months of listing inventory. There is only 6.8 months of inventory for properties listed under $500,000 compared with 10 months at the beginning of 2010, in the price bracket of $500,000 to $1,000,000 there is 15 months of inventory down from 22 months at the end of 2009 and over $1,000,000 there is 34 months of inventory vs. 45 months at the end of 2009 based on March 2010 closed sales. Six months of inventory is considered a neutral market meaning neither a buyers or sellers market so the market for properties listed under $500,000 is fast approaching this benchmark.

Posted in General

Real Estate Report for February 2010

By Michael Moulton on March 24, 2010

The following statistical data is from information provided through the Multiple Listing Service of the Sarasota Association of Realtors. The following table summarizes what happened in each price segment. The Sold M, Pend M (Pending) and List M (Listings) columns are new transactions that happened during February 2010 and the Pending and Listed are the totals of each in the MLS system and the Sold column are the total sales for 2010 year to date.

Houses	Sold M	Sold	Pend M	Pend	List M	List	Sold ‘09
&$250,000 & under	242	468	288	1064	192	1056	3055
$250,000 to $500,000	60	128	85	330	142	800	958
$500,000 to $750,000	13	31	28	87	50	342	273
$750,000 to $1,000,000	6	13	10	50	27	226	87
$1,000,000 to $2,000,000	8	19	7	37	36	324	106
$2,000,000 & above	3	5	4	21	21	248	43
Totals	332	664	422	1589	468	2996	4522

Condominiums	Sold M	Sold	Pend M	Pend	List M	List	Sold ‘09
&$250,000 & under	125	245	129	549	139	1070	1431
$250,000 to $500,000	42	82	40	121	74	644	474
$500,000 to $750,000	12	29	13	40	31	302	163
$750,000 to $1,000,000	2	5	9	21	14	145	65
$1,000,000 to $2,000,000	6	8	11	20	15	138	60
$2,000,000 & above	3	7	2	3	6	88	20
Totals	190	376	204	754	279	2387	2213

Grand Totals	552	1040	626	2343	747	5383	6124

64% of the months sales were single family homes and 36% were condominiums. Of the total sales 70% were properties that sold for $250,000 or less, 20% were sold for between $250,000 and $500,000, 5% sold for between $500,000 and $1,000,000 and 5% sold for over $1,000,000. The overall listing inventory is down 21% from the end of 2009.

As the statistics relate to listed properties vs. sold properties we have 9.5 months of inventory overall which is down from 12 months at the end of 2009. There is only 7 months of inventory for properties listed under $500,000 compared with 10 months at the beginning of 2010, in the price bracket of $500,000 to $1,000,000 there is 22 months of inventory and over $1,000,000 there is 45 months of inventory. Six months of inventory is considered a neutral market meaning neither a buyers or sellers market so the market for properties listed under $500,000 is fast approaching this benchmark. Hopefully as 2010 progresses we can put a dent into the luxury market inventory.

Posted in General

How Does Unemployment Affect Home Value?

By Michael Moulton on February 22, 2010

The good news for the housing sector is that existing home sales in the U.S. rose 10.1% in October, 2009, and we are beginning to see signs of stabilization. [See Policy, Price, and Product Are Used to Assess Market Recovery for details.]

There is widespread agreement that problems in the housing market caused the financial crisis and led to the recession. It’s important to note, however, that the housing market is inextricably linked to the employment sector and a sustained improvement for housing might not be realized until the broader economy, including the job market, has recovered.

Demand for housing is driven by demographics—the number of new households being created—and the jobs picture. The job picture, in particular, is crucial for residential real estate since employment allows homeowners to keep their mortgage current and avoid foreclosure.

Therefore, if you’re anxious to predict the value of your home one or two years from now, it’s worthwhile to consider the status of the labor market and the progress being made in the area of jobs creation. Remember too, that real estate conditions vary greatly by region, so keep your eye on the local job market as well as what’s happening on a national level.

Posted in General

Policy, Price, and Product Are Used to Assess Market Recovery

By Michael Moulton on February 15, 2010

Existing home sales in the U.S. rose 10.1% in October, 2009. This is good news for the housing sector that has been hurt by an exceedingly large inventory of unsold homes and unprecedented rates of foreclosure.

Government Policy

The ability of the housing market to stand on its own, unaided by federal stimulus, will be tested very soon. The end is nearing for two federal policies that are credited with providing a boost to the housing market this year. The $8,000 tax credit for new home buyers was extended, but is scheduled to end in the spring of 2010. Secondly, the Federal Reserve, which purchased mortgage securities in an effort to keep mortgage rates low, has indicated that aid will soon cease as well.

The key will be to stabilize the number of unsold homes so the market can operate normally. Experts predict that the housing market has about six months to reduce inventory encouraged by government incentives.

Home Prices

The spring of 2010 may be the market’s best hope for a significant upswing in home values—the first in more than three years, says Michael Englund, chief economist at Action Economics. When the weather gets warmer in spring, home buyers are most active and housing prices often move higher.

While we don’t often equate higher prices with good news, a rise in home prices reflects equity growth. Because homes are a critical component of wealth, this will be a welcome trend for those of us whose wealth is represented largely by our homes.

Housing Inventory

Excess inventory has caused an imbalance in the housing market’s supply and demand balance. There are signs of improvement, however. A ‘normal’ inventory of existing home supply would be equivalent to 5 ½ to 6 months supply of homes. While October, 2009, saw a seven months’ supply of existing homes on the market, this was down from an eight month supply in September.

Beyond the inventory accounted for, economists and real estate experts are still speculating about how much “hidden supply” is out there waiting to come to market. This hidden supply is in the form of buyers who are waiting for better market conditions before listing and the many foreclosed homes that are in process and not yet back on the market. On a positive note, home builders are adding very little new supply, which is helping to stall further imbalance.

Posted in General

Bird Key 2009 Year End Real Estate Perspective

By Michael Moulton on February 8, 2010

There were 34 homes sold this past year, identical to 34 in 2008, 32 in 2007 and 18 in 2006. The annual sales volume was $32,000,000 compared to $46,000,000 in 2008 and $75,000,000 in 2007. The main reason for the significant decrease in the sales volume is that there has only been one sale of a substantial bay front home this year. Homes sold on average for 76% of list price compared to 80% in 2008. The average days to contract are down from 200 in 2008 to 181 days. Twenty three of this years closed sales were garden homes as opposed to the more expensive waterfront homes. The average sale price for a bay front home has declined 40% from the sold price in 2008 and 2007 while the average sold price for a canal front home has decreased only 10% and a garden home’s average price has decreased 29%. Bay front homes sold for an average of $558 per square foot, canal front homes for $326 and garden homes $249.

Beginning in 2010 there are 39 active listings available on Bird Key, identical to the beginning of 2009 with prices ranging from $539,900 to $9,490,000. There are 8 pending sales to start the year.

Bird Key 2009 Year End Sales Statistics

	2009	2008	2007	2006
Homes Sold Total	34	34	32	18
Homes Sold Bay Front	5	4	11	5
Homes Sold Canal Front	6	9	9	3
Homes Sold Garden	23	21	12	10
Sales Volume Total	$32.0m	$46.1m	$75.3m	$31.8m
Price Range Bay Front	$4.75-1.3m	$6.9-2.8m	$7.7-2.4m	$3.99-2.15m
Price Range Canal Front	$1.25-894k	$2.2m-$876k	$2.7-910k	$2.85-1.85m
Price Range Garden	$845-400k	$1.7m-432k	$1.795m-500k	$1.75m-747k
Bay Home Average	$2,445,000	$4,050,000	$4,228,409	$2,978,000
Canal Home Average	$1,254,800	$1,400,111	$1,887,777	$2,191,666
Garden Home Average	$587,513	$825,214	$982,750	$1,030,242
Days To Contract	181	200	200	173

Bird Key 2009 Sales

552 S. Spoonbill Drive	$4,750,000	May
227 Robin Drive	$2,450,000	November
445 Meadow Lark Drive	$2,225,000	December
207 Robin Drive	$1,500,000	June
586 S. Spoonbill Drive	$1,300,000	July
454 Partridge Circle	$1,250,000	December
524 N. Spoonbill Drive	$1,150,000	May
635 N Owl Drive	$1,050,000	December
524 N. Spoonbill Drive	$1,025,000	March
662 Mourning Dove Drive	$905,000	November
118 Seagull Lane	$894,000	December
404 Partridge Circle	$845,000	May
450 E. Royal Flamingo Drive	$842,500	April
274 Robin Drive	$799,000	November
221 Bird Key Drive	$720,000	June
499 Partridge Circle	$660,000	March
323 Bob White Way	$655,000	April
531 N. Spoonbill Drive	$650,000	August
546 Bird Key Drive	$625,000	May
619 Owl Way	$587,500	October
628 N Owl Drive	$585,900	November
435 Partridge Circle	$565,000	January
336 Bob White Way	$565,000	November
336 Bob White Way	$565,000	July
516 Spoonbill Way	$520,000	March
573 Bird Key Drive	$518,000	August
430 Bird Key Drive	$515,000	March
420 Wood Duck Drive	$500,000	March
618 Owl Way	$500,000	September
476 E Royal Flamingo Drive	$500,000	October
518 Bird Key Drive	$480,000	January
268 Robin Drive	$475,000	November
649 S. Owl Drive	$439,900	July
238 Robin Drive	$400,000	July

Posted in General

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