Nationally, sales of new US homes were basically flat in January, evidence that recent job gains and relatively low mortgage rates have yet to spur the real estate market. The Commerce Department said that new home sales slipped 0.2% last month. This marks a slight decrease from sales in December, but represents a solid 5.3% gain from a year ago. Despite the increasingly favorable economy, home sales have been sluggish at the start of the year. Still, many analysts expect that the housing market will gather momentum with the start of the spring buying season.
Also nationally, sales of existing homes last month sank 4.9%. Contributing to that 9-month low was a tight inventory of homes on the market that sent prices higher.
Statewide, Florida’s housing market had higher median prices, more new listings and continued stabilization of inventory in January, according to the Florida Association of Realtors. Closed sales of single family homes statewide were up 10% last month over January of 2014. “Home price gains in areas across Florida mean that home equity continues to improve and that, coupled with historically low interest rates, generates a great opportunity for sellers,” says 2015 Florida Realtor’s President Andrew Barber.
Rick Brown of The Brown Realty Group says, “Certainly what happens to the housing market in the mid-west and northeast will impact our housing market here in SW Florida. However, even though sales of new homes up north is sluggish, that is not the case here in Lee and Collier counties.”
New homes continue to ease the inventory shortage in Lee and Collier county, though only for those with “fat wallets”. A report recently released by Metrostudy showed that the annual new home starts rate in the combined Naples/Fort Myers market has grown for 14 consecutive quarters. This report includes detached and single family homes, but not condominiums. The annual starts rate grew to 4083 units in the 4th quarter of 2014, up 25% from the same quarter a year earlier, the report indicated.
“While upper-end housing is booming, not much is being built in price ranges under $250,000,” according to Brenda Brown of The Brown Realty Group. Only 571 homes that cost less than $250,000 were built in the 4th quarter last year, down 53% from a year earlier, while new homes under $150,000 are practically non-existent, Brown explained.
Speaking of upper-end new homes, Toll Brothers, which specializes in higher-end homes reported Monday that its quarterly profits shot up 78% as the average price of a home sold by Toll climbed to $821,500 from $766,100. Stock Development, which specializes in the Luxury Real Estate Market, is absolutely on fire in the high-end market of Naples. Specifically, in Quail West, Stock closed more than 80 luxury home transactions in 2014 with an average price approaching $2 Million. With prices per square foot of the new home construction in Quail West approaching $700, many buyers are beginning to look at the more affordable luxury re-sale home product.
Brenda Brown says, “Many of the baby-boom buyers are growing increasingly frustrated by the eye-popping costs of new construction in the luxury communities such as Quail West and Mediterra.” Brown says, “Now, instead of purchasing a new home at $600-$700/sq ft, these baby-boomers are beginning to buy the luxury re-sales and are renovating those homes. When completed, those stunning and remodeled estates have cost the baby-boom buyer under $400/sf.”
For example, The Brown Realty Group has just listed (see below) a 6400sf home on Pondview Circle in Quail West. This home is listed at $297/sf. If a buyer of this home thought it necessary to spend $100/sf ($640,000) to remodel this estate, that buyer would still be $200-$400 per square foot less than a comparable new home in this community. If you would like to talk with Rick and Brenda about this type of home-buying strategy, please give us a call at your convenience.
Whether buying or selling, The Brown Realty Group is “The Professional’s Professional”. Our work is our passion and you won’t find a team that holds a higher standard of professionalism and integrity. Let us know how we can help!