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July 2015 Market Update

Best/Worst U.S. Cities for Retirement (Cape Coral 8th Best)
 
Bankrate recently ranked the best & worst cities to retire in. The survey was based on cost of living, weather, crime rate, health care quality, tax rates, walkability and a measure of well-being based on surveys of seniors already in the areas. Bankrate found out that 60% of people who aren't yet retired would consider moving in retirement.
 
While people might expect Florida cities along the coast to be some of the more desirable locations for seniors, the major Florida cities didn't make the top 10 because of rain and humidity, and how expensive it can be to live in cities such as Miami. Northeast cities fare poorly due to cost of living and cold. Here is the top ten list for Best and Worst Retirement Cities
 
Best Retirement Cities                                            Worst Retirement Cities
 
1. Phoenix Metro Area, incl Mesa & Scottsdale        1. New York City
2. Arlington/Alexandria, Va.                                       2. Little Rock, Ark.
3. Prescott, Ariz.                                                        3. New Haven, Conn.
4. Tucson                                                                  4. Buffalo
5. Des Moines                                                           5. Newark
6. Denver                                                                  6. Albany
7.Austin                                                                    7.Hartford                                                           
8. Cape Coral                                                          8. Oakland, Ca.
9. Colorado Springs                                                 9. Indianapolis
10. Franklin, Tenn                                                   10. Cleveland
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Shortage of Rentals Prompting More Home Sales to Seasonal Owners

Due to a severe shortage of seasonal rental homes in SW Florida, many snowbirds and foreigners are practically forced into buying a home if they want to spend their winters here. These semi-forced home sales are further depleting our already low inventory, as discussed in the next topic.
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Cape Coral Home Inventory Falls to 2.6 Months
 

Cape Coral had an unseasonably high number of home sales in June, which reduced the home inventory to 2.6 months of single family home inventory. There were 500 sales in June and only 1,300 homes for sale. These figures represent the highest sales numbers and lowest Cape Coral inventory perhaps in our history. Unless we are reading all the signals wrong, July will also be unseasonably strong for home sales, with the trend possibly continuing into August. This is highly abnormal for our off-season market in SW Florida.

This is almost a scary level of low home inventory which will lead to even more bidding wars than we've already experienced this year. Many of our clients have lost out on homes to other buyers, even when they were ready to make an offer soon after the home hit the market.

Tom: This low inventory further validates my position that we need many more new homes....and soon. And it helps make the case that land will spike in value until we reach a more normal level of inventory.
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Lee & Collier County Property Taxes Higher Than Original Projections
 

New reports show the taxable value in Lee County is about $1.2 billion more this year than appraisers originally reported a month ago. Lee County taxable values from the Assessor's Office now show a 7.5% increase, as opposed to the original 5.5% reported increase. The new values will be sent to the state's Department of Revenue. Once approved, Lee County residents will receive TRIM notices around mid August.

In Cape Coral the taxable value is $180 million more than what appraisers reported on June 1. As a result, Cape Coral's taxable value for this year increased 7.75% over last year, as opposed to the 6.1% increase projected a month ago. Below are area city's updated property tax increases:

Ft Myers: 9.4%   Bonita Springs: 9.7%   Pine Island: 5.8%   
Collier County: 8.6%   Naples: 8.3%
 
Tom: As we've reported numerous times, the Assessors Office is a few years behind true market value. An encouraging note is that folks who already bought and Homesteaded will not receive property tax increases higher than 3%, or the National Cost of Living, whichever is less. I expect future property tax increases to be higher than this year as the Assessors Office eventually catches up to actual market values.  If you are close to purchasing a Florida home, you will save property taxes every year on your Florida home if you close before year's end.
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Homebuyer's Most Important Concerns When Looking for a Home
 
RootMetrics surveyed people to determine their top concerns when selecting  a home to purchase. Here are the results in order of importance:
 
* Crime Rate -  96%
* Local Taxes -  90%
* Amenities, like shops, parks and restaurants - 84%
* Hospitals - 76%
* Cell Phone Reception -  76%
* Schools - 60%    Sue: something seems askew when cell phone reception is more crucial than schools
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U. S. Real Estate on Track for Best Year Since 2006

 

"The residential real estate market is on track for its best year since the peak of the housing bubble in 2006", notes realtor.com® economist Jonathan Smoke. But Smoke is quick to point out, "this time it's not a housing bubble because job growth is fueling the most recent demand for homes". More than 3 million jobs have been created in the past 12 months.

As job growth increased, demand has followed, and homes are selling more quickly. The median Days on Market of inventory nationwide in May was 66 days – eight days faster than last year. Some markets are even seeing inventory move in just 18 to 45 days, realtor.com notes (SWFL is in the low Days on Market category). A recent survey determined that a stunning 28% of U.S. homes are selling within two weeks.

Homeowners are seeing strong gains in equity again. At the current level of growth, total home sales this year could near 6 million, which is near the peak seen in 2006.   Median U.S. home prices climbed 7.9% over the past 12 months to $228,700, about $1,700 shy of the July 2006 peak.Tom: four years ago I became very optimistic about the improvement of our local and national real estate markets, but everyone told me that we would never again see the high sales numbers or home prices of 2006. Based on historical trends and favorable market indicators I vehemently disagreed with the dissenters. We are almost there in sales numbers and well within striking distance of prices. It feels good to no longer be in a minority of one.
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Facts and Stats
 
Shark Attacks Very Rare in Lee/Collier Counties:  From 1882 through 2014 (133 years), there have been 717 shark attacks in Florida. Eleven people have been killed by sharks in Florida since 1882, none in Lee or Collier counties. On another interesting note; shark deaths average one person every two years in the U.S., while lightning kills 38 people on average every year.
 
RealtyTrac Lists Cape Coral as 4th Best "Bounce Back" Market: According to a February 2015 "Home Price Appreciation Analysis" by RealtyTrac, Cape Coral home values rose by 102% after hitting bottom in November 2010. This places Cape Coral as the 4th best "bounce back" market in the country. Tom: Cape home prices have appreciated another 8% since the February report.
 
7.3 Million Boomerang Buyers Able to Buy Homes Again: This is the number of potential homebuyers who lost their homes to foreclosure or short sale and have passed the seven-year window needed to repair credit and qualify to buy a home. Tom: Depending on various factors, many boomerang buyers can qualify for a home loan in less than 7 years, with 4 years being a main threshold. Between Millenials and Boomerang buyers, I anticipate several years of strong real estate growth.  
 
"Free and Clear" Homeownership Stats:
* 31% of all U.S. home owners own their home free and clear
* 68% of seniors own their home free and clear, and the remaining 32% will be mortgage free within 6 years.

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Tom & Sue Demogenes

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