The Florida Keys Real Estate News & Market Trends Blog

You’ll find our Florida Keys Real Estate Blog to be a wealth of information, covering everything from local market statistics and home values, home buying and selling ideas and tips, to community happenings from Key Largo to Key West. That’s because we care about community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Aug. 28, 2020

Highest Homes Sales since 2005: Can it Last ?

Highest Home Sales Since 2005. Can It Last?

July marked the third consecutive outsized increase in the Pending Home Sales Index (PHSI) produced by the National Association of Realtors® (NAR) It also was the third of three July sales measures to surprise analysts. NAR said the PHSI, a leading indicator of home sales based on newly signed purchase agreements, rose 5.9 percent from 116.1 in June to 122.1.

The increase in the PHSI was the smallest gain among the home sales indicators. New home sales rose 13.9 percent in July and new home sales soared 24.7 percent. Nonetheless, the performance is impressive given that the index has more than recovered from the 88.2 level to which it plunged in April as the nation shut down in response to the outbreak of coronavirus.

The July gain, which put the index up 15.5 percent compared to a year earlier, bodes well for existing home sales in August and September. Pending sales are generally expected to close within one to two months of contract signing.

"We are witnessing a true V-shaped sales recovery as homebuyers continue their strong return to the housing market," said Lawrence Yun, NAR's chief economist. "Home sellers are seeing their homes go under contract in record time, with nine new contracts for every 10 new listings."NAR said the strong summer sales are an indication that the pandemic merely delayed rather than obliterated the "spring market." With most of the states that shut down now reopened, the market is benefiting from the pent-up demand. Yun says there are no indications that contract activity will wane in the immediate future, particularly in the suburbs.

There had been no true consensus over the pending sales report. The range of estimates from analysts polled by Econoday was -0.5 percent to 10.0 percent while the median for MarketWatch was 3.0 percent and Trading Economics predicted 4.0 percent.

Yun expects existing-home sales to ramp up to 5.8 million in the second half of the year. That expected rebound would bring the full-year level of existing-home sales to 5.4 million, a 1.1 percent increase from last year. He forecasts sales of 5.86 million in 2021, supported by an economy that he expects to expand by 4 percent and a low interest rate environment, with the 30-year mortgage rate average of 3.2 percent.

"Anecdotally, Realtors are telling me there is no shortage of clients or home seekers, but that scarce inventory remains a problem," Yun said. "If 20 percent more homes were on the market, we would have 20 percent more sales, because demand is that high." He added that he expects housing starts to average at 1.35 million in 2020 and to pick up in 2021, to 1.43 million.

All four regional indices recorded month-over-month gains in contract activity in July. The PHSI in the Northeast rose 25.2 percent to 112.3 in July, 20.6 percent higher than a year earlier. In the Midwest, the index rose 3.3 percent to 114.6, up 15.4 percent from the previous July.

The PHSI in the South had a 142.0 reading, up 0.9 percent and 14.9 percent from the two earlier periods.  The index in the West rose 6.8 percent to 106.4, an annual increase of 13.2 percent.

The PHSI is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. Existing-Home Sales for July will be reported September 22.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.


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Aug. 28, 2020

Don't Be Fooled By Today's Mortgage Rate News

Don't Be Fooled By Today's Mortgage Rate News

Let's keep this short and simple.  There are some major misconceptions out there today and for many of you, it's very important to address them.  What are the misconceptions?

Misconception 1: Rates are lower today than they were yesterday

This one is very easy to clear up.  It's a frequent Thursday occurrence, actually.  It stems from the weekly release of Freddie Mac's mortgage market survey which admittedly only collects responses on Mon-Wed.  In other words, if rates were lower on Mon, Tue, Wed this week compared to the same 3 days last week, Freddie's survey will say as much.  From there, the scores of journalists who rely on this survey for their weekly mortgage rate coverage will pump out headlines that neglect to mention the Mon-Wed caveat.  The net effect is that Today's rates could be higher than yesterday's (and they certainly are) despite multiple news stories printed today saying the opposite.  


Misconception 2:
 The Fed did something to suggest lower rates today

The Fed DID do something today.  And it's even fair to say it indicated certain rates would be lower for longer.  BUT, it's eternally and tremendously important to remember that the rate controlled and set by the Fed has almost nothing to do with the mortgage market on any given day.  

The Fed sets an overnight rate.  Mortgages, on the other hand, last many years on average.  That makes the debt associated with these rates VERY different in the eyes of investors.  For instance, the Fed held its policy rate at 0-0.25% for years after the financial crisis, but mortgage rates moved up, down, sideways, and every way in between during the same time (and never went below 3%, for what it's worth).

If anything, today's update from the Fed is arguably BAD for longer-term rates like mortgages.  If you'd really like to geek out on the reasons, you can dive deeper here and here.  Long story short, the Fed confirmed its long-telegraphed plan to let inflation get higher than their previous framework allowed for.  High inflation is bad for low rates.  It also connotes a higher comparative level of economic activity and employment.  Those things are also not good for rates.

In fact, there's a risk that the market treats this as a cue to try to push longer term rates back up to the levels seen in early June.  Combine that with the impending re-introduction of the much-maligned refinance fee (which most lenders will implement well before the end of September) and there should be a real sense of urgency for those considering getting a mortgage.

Aug. 22, 2020

Keys July 2020 Sales Stats Rock it !

Florida Keys Real Estate Sales Statistics for July 2020 are nothing short of staggering in some cases...some Year over Year highlights:

Single family homes:

  Dollar volume +132.9%

  Paid in Cash +257.1%

  New pending sales +64.2%

  Pending inventory +71.2%

Manufactured Homes:

  Closed sales +2300%

  Paid in Cash +1400%

  Dollar Volume +3057.5%

  New Pending Sales +1700%

  Pending inventory +700

Condos and Town homes:

  Paid in Cash +50%

  Dollar volume -25.8%

  New Pending Sales +150%

  Pending Inventory +166.7%

WOW...about 30% of all Keys Real Estate for sale is under contract right now !!  Inventory and Months of supply numbers are way down across the board, as buyers compete for the dwindling supply of homes in Paradise, as the looming build out here in the Keys approaches.

What's going on? Demand from just about every demographic and geography for all possible reasons has lit a fire under Florida Keys Real Estate.  I think Covid has also changed attitudes towards work, retirement, health, safety, and quality of life, in a manner that has made owning Florida Keys Real Estate even more attractive than it already was.

Contact us to find out how owning Florida Keys Real Estate can fit into your plans ! 

 

 

 

Aug. 22, 2020

Florida Keys market Stats July 2020 Manufactured

Aug. 22, 2020

Florida Keys market Stats July 2020 Town homes and Condos

Aug. 22, 2020

Florida Keys market Stats July 2020 Single Family

Aug. 11, 2020

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1160 1st Ave 33 open water view

The wonders of this expansive villa start at the front door, featuring a warmly inviting arched flowering trellis covered with tropical greenery at the entrance. Lovely and romantic French doors with retractable screens at the back let in fresh air in the fall, winter, and spring. The spacious second floor master bedroom suite has a king size bed, 42" HD Flat Screen TV, Blu-ray DVD Player, and an en-suite bathroom with 2 sinks. You will fall in love with its balcony where you will enjoy framed by both windows and French doors to best enjoy the magnificent views of the Gulf of Mexico and sunsets that you will forever remember with joy.

In this well laid out town home, the second delightful upstairs bedroom has a dreamy Queen bed with a 26" flat screen TV and a balcony with chairs and side tables to relax at. The third bedroom features two twin beds, making the villa a very comfortable destination for up to 8 people! Full sized washer and dryer are conveniently located next to the bathroom near the two bedrooms.

July 25, 2020

How Low can Mortgage Rates Eventually go?

How Low Can Rates Eventually Go?

June 30, 2020

Florida Keys Market Stats May 2020 Manufactured

June 30, 2020

Florida Keys Market Stats May 2020 Townhouse and condo