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A Record-breaking Month for the Housing Market

April was a quick selling month for the , according to Redfin. sold faster during the month than any other month Redfin has recorded since 2010, with homes staying on the market for just 36 days on average. This is six days faster than April of 2017. Homes were more expensive as well, with the national home sale price crossing the $300,000-mark for the first time in Redfin’s history. The median national home price was $302,000.

“Despite rising prices and low inventory, sales in 2018 so far are slightly higher than last year, which was the best year on record since the 2006 housing boom,” said Redfin Chief Economist Nela Richardson. “As we enter peak homebuying season, new listings will be key in maintaining sales growth and moderating the rapid price increases we’ve seen this year.”

In April the market gained a 5.7 percent month-over-month increase in newly listed homes , a welcome relief in a month that saw a 9.2 percent year-over-year decrease in available homes. Of all the homes for sale in April, 26.2 percent sold for above their list price, a year-over-year increase from April 2017’s 24.9 percent.

Redfin also notes that only 2.8 months of supply remained at the end of April, while six months of supply is the signal of a healthy market. Tough competition due to the limited supply has raised prices in every large metro; no metro area with a population of 750,000 or more saw any decline in prices in April.

 

 

According to Redfin, Michigan metros were the most competitive and fastest growing in the nation. Detroit experienced a 21.2 percent year-over-year price increase, the second highest in the nation behind San Jose, followed by Grand Rapids, where homes spent on average just nine days on the market.

“Detroit and Grand Rapids are no different than other cities dealing with low inventory. In addition, buyers are pouring in from the east coast, west coast, and Chicago, which is adding to the demand,” said Kent Selders, a Redfin Market Manager in Michigan.

See how inventory shortages and price increases are impacting other metros here.

Tavistock buys 1,000-plus acres of Orlando airport land for $64M

Lake Nona is expanding its boundaries south of and it now owns the land it needs.

Lake Nona developer  Development Co. LLC’s related entity TDCP LLC spent $63.9 million, or roughly $55,700 per acre, on May 10 for nearly 1,147 acres south of International Airport from the Greater Orlando Aviation Authority and the city of Orlando, Orange County records showed.

The three different parcels, two in Orange County and one in Osceola County along Narcoossee and Boggy Creek roads, will be used by Tavistock to develop a portion of a mixed-use project west of Narcoossee Road, north and east of Boggy Creek Road near the Orlando VA Medical Center, Tavistock spokeswoman Jessi Blakley told Orlando Business Journal.

The project, known as the Poitras planned development, includes:

  • 2,973
  • 100,000 square feet of commercial use
  • A school on 25 acres

Tavistock previously sought approval from the city earlier this month to rezone the property as a planned development with aircraft noise.

The 11,000-acre Lake Nona already has billions of dollars worth of underway and there’s even more growth ahead. See the photo gallery above for a sampling of Lake Nona projects in the works, and read more from OBJ‘s Doing Business in Lake Nona event from earlier this month.

The Impact of Supply Shortage on Luxury Housing

 

 

 

The supply shortage of is not limited to the median home only. The first quarter of 2018 saw the also feeling the heat of inventory shortage as prices for high-end homes saw the strongest appreciation in four years, according to a report on the luxury housing market by Redfin.

This quarterly report tracks home sales in more than 1000 cities across the country and defines a home as a luxury property if it is among the top 5 percent most expensive homes sold in the city during the quarter.

Prices for luxury homes rose nearly 8 percent to an average of $1.8 million during the quarter, Redfin found. However, this did nothing for sales of these homes which fell 20 percent marking four consecutive quarters of declining sales in this segment of the housing market.

“For the first time since changes to the tax code went into effect, luxury buyers could no longer deduct more than $10,000 in state and local property taxes or interest for mortgages over $750,000,” said Nela Richardson, Chief Economist at Redfin. “In a world of balanced supply and demand, these changes would have dampened price growth. Instead, this quarter saw the strongest luxury price appreciation in four years, demonstrating that the current inventory crunch is extremely broad-based and affects buyers at every price range.”

The inventory shortage is also escalating competition for luxury homes. The report indicated the average luxury home that sold last quarter went under contract after 82 days on the market, nine days faster than the same period last year. While only 1.5 percent of luxury homes were bid up over the asking price, that’s up from 1.3 percent in the first quarter of 2017.

In terms of regions, Florida and Nevada saw strong growth in prices of luxury homes with average sale prices in Vero Beach increasing 68 percent to $2.65 million over last year while those in Reno going up 51.3 percent. On the other hand, some cities known for their luxury homes actually saw a decline in prices.

Homes in Long Beach, California led this group of cities with prices falling 26.1 percent year-over-year in the first quarter. Prices in Washington, D.C. also saw a decline of 9.6 percent as did Fort Lauderdale, which saw prices falling 7.3 percent.

Developer plans new 2,558-acre community near Lake Nona

A planned 2,558-acre, mixed-use community going up near wants to change some of its plans.

The Starwood project, being developed by Beachline South Residential LLC on land south of State Road 528 and east of State Road 417, will add a high school and new signage into the mix of commercial uses and thousands of .

Applicant Dewberry Engineers Inc., which is the civil engineer and landscape architect for the project, sent a submittal to the city of Orlando to amend the future land-use map and planned-use development map. The request will be discussed at a June 19 municipal planning board meeting.

“The changes are mostly the result of an agreement reached with Orange County School Board regarding placement of a high school site within the development,” the project description reads. The changes are also a result of the road realignment on Dowden Road.

Beachline South Residential LLC, an entity of Palm Beach Gardens-based Land Innovations LLC, wants to build:

  • Office space on 1,680 acres
  • Commercial space on 81 acres
  • Public recreation and institutional areas consisting of 65 acres
  • Industrial space on 33 acres
  • Roughly 670 acres will be set aside for conservation.

The development team also includes Donal W. McIntosh Associates Inc. as the surveyor, VHB as the traffic consultant, Bio-Tech Consulting Inc. as the environmental consultant and Devo Engineering Co. as the geotechnical engineer.

Proposed home sites will range from 20-foot townhome lots to 70-foot estate lots, Mattamy Homes said in a news release. Communities amenities will include centers of different sizes throughout the community as well as a more than 20-mile system of interconnected walking trails and bike paths.

“Orlando continues to demonstrate that it is one of the strongest markets in the state of , as evidenced by the positive demographic trends including employment and population growth,” Mattamy Homes Orlando Division President Alex Martin previously said in a prepared statement. “We consider the Starwood Property an excellent complement to our existing Randal Park community and an opportunity to maintain our strong presence in this highly desirable and rapidly growing area of Central Florida.”

Jay Thompson, Land Innovations managing partner, had said the home prices would start at about $230,000 and go up to $1 million.

Massive solar project for Central Florida

Good morning, !

OUC and 11 municipal utilities from across the state are teaming up to build three massive solar farms.

The groundbreaking agreement allows for 900,000 solar panels that will provide energy for as many as 45,000 . The three solar sites on 1,200 acres in rural Orange and Osceola counties will provide 223.5 megawatts. OUC will be the largest tenant, purchasing 108.5 megawatts of solar energy, or enough for more than 20,000 residential customers.

“OUC could have done this on its own, but by partnering with other municipal utilities, we can make a dramatic difference not just in Central , but really throughout the entire state,” said Clint Bullock, OUC’s general manager, and CEO. “We can leverage the economies of scale to bring the price of solar down to a point where a dozen municipal utilities can afford to sign on.”

The solar farms are expected to be completed by 2020, and exact locations in Orange and Osceola are still being finalized through a permitting process.

Luxury apartments in the pipeline for I-Drive-area project

A 64-acre mixed-use development near International Drive is gearing up to tackle its multifamily component. The whole mixed-use project will cost more than $350 million to develop and should be completed by 2019. More here.

Fun Spot debuts new Orlando ride

Fun Spot America, which opened a new Orlando ride called HeadRush 360 on May 1, now plans to spend $2 million to add a new multi-level go-kart track dubbed Samson Monster Track at its Atlanta property. More here.

Here’s how Orlando ranks for diversity

With immigration policy remaining a hot-button issue in 2018’s political landscape, WalletHub released its report on 2018’s Most Diverse Cities in America. To determine the cities with the most mixed demographics, WalletHub compared more than 500 of the largest cities across five major diversity categories: socio-economic, cultural, economic, household and religious. Orlando came in at No. 68.

Cruises from Port Canaveral to Cuba start Monday

The Norwegian Sun embarks on the first regularly scheduled cruise from Port Canaveral to Cuba on Monday, Florida Today reports. The cruises, which will depart from the port every Monday this summer, will include stops in Havana, as well as in Key West.

After weeks of jumping, mortgages rates take a modest dip

U.S. mortgage rates fell last week after rising to their highest level in four years, according to Freddie Mac. The 30-year fixed mortgage averaged 4.55% for the week ending May 3, down from 4.58% the previous week. Favorable mortgage rates have helped drive U.S. home sales, as well as the refinance market.

Tracking Spring Housing Trends

 

Things always warm up in the spring, but experts are detecting record-breaking heat this year—at least in the . Inventories are low, are flying off the market, and prices continue to rise, according to Realtor.com’s Monthly Housing Trends Report for April.

The report deemed this “the hottest spring housing market on record,” and a cool-down does not appear imminent.

“The dynamics of increased competition and buyer frustration are unlikely to change this spring,” according to analysts at Realtor.com. “In fact, the direction of the trend is pointing to a growing mismatch between the pool of prospective buyers and existing inventory.”

The hottest market in the nation is Midland, Texas, according to Realtor.com, which compared the 300 largest metro areas. Midland was followed by Boston-Cambridge-Newton, Massachusetts-New Hampshire; San Francisco-Oakland-Hayward, California; Columbus, Ohio; and Vallejo-Fairfield, California. Four of the 10 hottest housing markets are located in California.

Nationally, the median list price was up 8 percent over the year in April and 3 percent since March. The national median listing price in April was $290,000.

Of the 300 largest metros in the nation, 180 posted yearly price gains in April, leading Realtor.com to say, “the damage has been done and the majority of markets are unlikely to see improvements any time soon.”

Homes continued to sell with increasing speed in April, with a 5 percent drop in the median age of inventory from last year and a 9 percent drop from the previous month. The median age of housing inventory in April was just 59 days.

On the other hand, the market experienced a hint of relief from the pervasive heat in April’s inventory count. While inventory declined 6 percent over the year in April, Realtor.com noted this was a slower pace than previously charted. Month-over-month, the market actually posted an increase in inventory, up 5 percent from March.

At the metro level, fewer markets are experiencing declining inventory, and fewer markets posted double-digit price gains in April.

The number of markets that have the “deadly combination” of double-digit price gains and declining inventory dropped from 115 in April 2017 to 62 in April 2018.

“Local dynamics show the heat is being spread out more broadly than before, lighting the spark in more areas but stopping the fire in others,” according to Realtor.com.

Homes sold fastest in San Jose-Sunnyvale-Santa Clara, California, where the median age of inventory is just 19 days. The median age of inventory was shorter than 30 days in San Francisco-Oakland-Hayward California; Seattle-Tacoma-Bellevue, Washington; Salt Lake City, Utah; and Ogden-Clearfield, Utah.

The oldest inventory is in Bangor, Maine, where the median age of inventory is 159.5 days.

10 Markets Where Home Prices are Stable

 

 

While most of the country’s housing market fight rising prices due to low inventory, several U.S. cities remain outside the trend, with home prices remaining flat, or in some cases even falling. According to Trulia, cities such as Austin, Texas; Sacramento, California; and Denver, Colorado have seen home prices stay flat or even fall year over year. Other cities in Trulia’s list of “10 Markets Where Home Prices Aren’t Rising” are San Antonio, Texas; Honolulu, Hawaii; Camden, New Jersey; Milwaukee, Wisconsin; Houston and Dallas in Texas; and Sarasota, Florida.

San Antonio sits at the top of the list, with median home prices pegged at $269,499, a 5.4 percent decrease year over year, even with a job growth rate of 4.2 percent compared to the national average of job growth rate of 1.7 percent. Trulia estimates that despite job growth, home prices have fallen due to decreased wages in San Antonio by 2.6 percent, or simply, that are cheaper which hit the market within the last year.

Including San Antonio, Texas has four other cities on Trulia’s list: Dallas, Austin, and Houston. Austin saw a 3.4 percent decrease in the median home price year over year, down to $336,995. In Dallas, the median home price fell by 0.5 percent to $356,999. Houston, has the cheapest housing, with the median price at $299, 520, a 0.4 percent decrease year over year.

Other cities, such as Honolulu and Sacramento, despite being known for their notoriously high home prices, saw their market stabilize in the last year. Honolulu’s median home price was the highest on the list, at $630,000, but this is a 1.4 percent decrease from the previous year. Meanwhile, Sacramento, with a median home price of $429,000, saw no real change year over year, implying a stabilized market.

With a median listing price of $ 229,900, that remained unchanged over the past one year, Milwaukee was the only Midwest market on the list.

Now Is the Best Time to Sell … or Is it?

 

 

Rising home prices and a squeeze on inventory has more millennial homebuyers and potential sellers looking at upgrading their home admitting to being obsessed with timing the market to increase their gains, according to a recent study by ValueInsured.

The study found that among all homeowners surveyed who were interested in selling their home 69 percent said that they were concerned with trying to time the market, an increase of 13 percentage points from 56 percent during the same period last year.

Among those wishing to buy a home this season, the study found that 60 percent said they were concerned with trying to time the market, again reflecting a 13 percentage points increase over last year.

The pressure to time the market was most acute among millennials with 65 percent potential millennial homebuyers admitting that they were more market-timing conscious, up from 45 percent last year. Among millennial homeowners too, ValueInsured’s study found 73 percent millennial homeowners who wished to upgrade but were waiting for better prices admitting that timing the market was key to a better deal.

The study revealed that an eroding preference for owning over renting was one of the many factors that coincided with rising concerns over timing the market due to home prices and rising rates. “Americans, homeowners and non-owners, far prefer owning to renting if given a choice. However, that preference is sliding steadily, even among homeowners,” the ValueInsured study said.

While 68 percent non-homeowners believed that owning a home was better than renting, the data revealed that this was still a 4-point drop from 72 percent expressing the same sentiment last year. The percentage dropped among homeowners too, with 87 percent homeowners believing that it was better to own than rent, compared with 90 percent during the same period last year.

The study found that non-homeowning millennials were more confident that the housing market was moving in a direction that was more favorable to renters than owners, with nearly three in four (72 percent) millennial homeowners surveyed now believing that the housing market favored renting over buying.

 

Federal Open Market Committee Examines Economic Outlook

The Federal Reserve announced that interest rates remained unchanged after the end of the two-day policy meeting of the Federal Open Market Committee (FOMC). The Fed had last increased rates in March. The committee voted unanimously to keep the rates unchanged and said that it would monitor labor market conditions and the movement of inflation before announcing further rate hikes.

“In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1-1/2 to 1-3/4 percent,” the Fed said in a statement after the meeting. “The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.”

The Central Bank had stated that it was targeting an inflation rate of 2 percent at the beginning of the year, and after the meeting, it said: “On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 percent.”

The stability in rates this month will bring some respite to homebuyers who have been challenged by rising mortgage rates after the hike in overall interest rates by the Fed in March. Mortgage rates climbed to their highest level in over four years last week with the 30-year fixed-rate mortgage increasing for the third consecutive week to 4.58 percent. This according to the Freddie Mac Primary Mortgage Market survey that showed average mortgage rates had continued their upward march, continuing a trend seen since the beginning of 2018.

So should the market expect another hike in June? The committee said that the committee would assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. “This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments,” the Committee said in its statement.

Worries Climb Over Rising Home Prices

U.S. home sales have slowed to a crawl this quarter, mostly due to an entrenched combination of low inventory and consistently rising prices. The latter was true again in March, according to the latest Home Price Index report from CoreLogic. The HPI for March found that over the last year, home prices nationally rose 7 percent.

From February, prices were up 1.4 percent, but in year-over-year comparisons, CoreLogic found that all 50 states saw prices escalate since March of 2017.

“Home prices grew briskly in the first quarter of 2018,” said Frank Nothaft, Chief Economist at CoreLogic. “High demand and limited supply have pushed home prices above where they were in early 2006. New construction still lags historically normal levels, keeping upward pressure on prices.”

The largest annual gains happened in Washington and Nevada, where, CoreLogic found, home prices grew by 12.6 percent since last March. What’s more, CoreLogic expects prices to keep climbing and expects U.S. home prices to be 5.2 percent higher by next March. Prices are expected to rise 0.1 percent in April.

Of the 100 largest metropolitan areas, based on housing stock, 37 have an overvalued as of March, the report stated.

“Additionally, as of March 2018, 28 percent of the top 100 metropolitan areas were undervalued and 35 percent were at value” it stated.

When looking at the top 50 markets, CoreLogic found that half were overvalued. Seven were undervalued and 18 were at value.”

CoreLogic president and CEO  Frank Martell called this dynamic a clearly “unsustainable condition that can only be remedied by aggressive and coordinated public/private sector actions.”

According to Martell, rising home prices would remain a sober reality facing a lot of would-be buyers until it was “straightened out.”

“The dream of homeownership continues to fade away for the average prospective buyer,” he said. “Lower-priced are appreciating much faster than higher-priced properties, making the crisis progressively worse.”