10 year Treasury yield

It’s hard to believe that almost 1 year ago I was talking about the rise in interest rates and their effect on the real estate market here in Manatee and Sarasota counties.  Interest rates were running about 4.5-5%, and were the topic of all the news blogs, TV news stations included.  At that time I was still confident that the real estate market in our area of Bradenton, Lakewood Ranch, Sarasota, and the Islands would remain steady, for 2 reasons. First, about 50% of transactions in our area are cash.  Second, money was still relatively inexpensive to borrow.

 

10 year t-bond 1 month

10 year T-Bond 1 month

Fast forward one year and who would have imagined that rates today are about 3.5-3.75%.  Another interesting fact is that those who can afford to purchase with cash are opting for a mortgage.  Why?  Their financial advisors are telling them to keep the cash and use OPM (other people’s money).  In most cases, their portfolios are making more money than the current mortgage rates and providing positive cash flow, if only in terms of what they would be losing in return from investments had they taken out the cash.

Mortgage Rates- Freddie Mac

Mortgage Rates- Freddie Mac

  writes: Contrary to popular belief, mortgage rates are not based on the 10-year Treasury note. They’re based on the bond market, meaning mortgage bonds or mortgage-backed securities. When shopping for a new home loan, many people jump online to see how the 10-year Treasury note is doing, but in reality, mortgage-backed securities (MBS) drive the fluctuations in mortgage rates.

In fact, it is not unusual to see them move in completely different directions…

Some bond market reporters mistakenly tie mortgage rates to the performance of the 10-year Treasury bond. Many of these financial reporters possess a broad knowledge of bond markets, but they are not mortgage experts and do not fully comprehend how mortgage interest rates are determined.

In summary, the state of Florida is still experiencing large growth, mainly coming from high tax states.  Builders are very busy here in Lakewood Ranch and Sarasota, trying to keep up with demand.  As our “season” approaches for 2019-2020 we are expecting an even balance continuation of growth.  A 3-4% increase in year over year sales of existing homes and new builds would keep prices stable.  Low-interest rates will help the market continue in its upward trend.

Music on Main Lakewood Ranch FL

Spread over Manatee and Sarasota Counties in Florida is a master-planned community called Lakewood Ranch. It spread over an area of 31000 acres and considered one of the best places to live in Florida. Tucked in the southwest part of Florida, Lakewood Ranch is a community where people from all parts of the country are heading to, not just because of wonderful weather conditions but because they believe it is a great community to live and raise their kids. It is no wonder then that there is a great demand for Lakewood Ranch real estate among investors and common buyers.

Homes in Lakewood Ranch differ in style, architecture, and grandeur from one neighborhood to another. Not only are there nice ranches, but there are also villas boasting lush green gardens. If there are old villages like Greenbrook and Summerfield in Lakewood Ranch, you also find new gated communities: Arbor Grande, Mallory Park, and Esplanade. These gated communities are packed with amenities such as swimming pools, tennis courts, fitness centers, golf courses, and clubs.  Lakewood Ranch is a relatively young master-planned community, completing its 25 years this year. Today, it is home to more than 31000 residents and the number is increasing rapidly with each passing year.

Lakewood Ranch is a self-contained community in the sense that you will not need to go out for anything once you start living here. It has practically everything you will ever need to live a cozy life with your family. From dozens of shops to a number of restaurants and from parks to playgrounds, you will find that there is never a dull moment in life when you live in Lakewood Ranch. Schools are in all corners of the community and parents can be seen walking their kids to school.

Music on Main Lakewood Ranch FL

Lakewood Ranch is famous for its monthly community event called Music on Main, which happens on the first Friday of each month. This is a big attraction among the families living in the community and people can be seen enjoying live music and eating barbecue, tacos, sandwiches, and enjoying their favorite beer. The Lakewood Ranch Farmer’s Market is organized every Sunday from 10-2 from November to April where people get all sorts of fresh farm produce and even pottery and jewelry. Families enjoy live music and the Yoga classes that are organized in the evening.

Lakewood Ranch Farmers Market

Lakewood Ranch Farmers Market

If you are excited after reading this and interested in Lakewood Ranch real estate, you should contact a local, experienced realtor to buy a beautiful home for your family.

 

Multiple Offers

A multiple offer situation arises when a seller receives competing offers from two or more prospective buyers to purchase the listed property. The market conditions for multiple offers generally occur when there is a high demand for properties and a low inventory of listings or when the property is being sold by auction or a similar process sometimes referred to as an “Immediate Sale”. The primary objectives at all times are to represent your customer’s/client’s interest in the transaction and comply with the requirements of the Code of Ethics, the MLS rules, and the Company’s best practices. Multiple offers can be confusing for the seller, the prospective buyers, and even Realtors® if they do not understand the process and what obligations and options come into play for each person in the transaction.

Timely and honest communications reduce the stress for everyone while ensuring each offer is presented in an objective manner.

While a Realtor’s® primary duty is to protect and promote the interests of the client/customer, Realtors® are not relieved of their obligation to treat all parties honestly. Honest is not the same as fair. Sellers alone make the ultimate decision about what is in the seller’s best interest and how the seller wants to process the multiple offers received. Prospective buyers need to know: sellers do not have to treat the competing buyers fairly when negotiating with them nor must the offers be negotiated in the order they are received.

Seller Options: The seller has several options in responding to the multiple offers submitted. The seller decides on how to proceed and the listing agent’s duty is to provide counsel and explain the process to help the seller make an informed decision in the seller’s best interest. Seller’s options: 1) Accept one offer and reject the others; 2) Reject all the offers; 3) Work with just one of the prospective offers and counter that offer and reject the others; 4) Allow all of the prospective buyers the opportunity to improve their offers and present their “highest and best” offer by a set deadline. Upon receipt of the offers, the seller would then make a decision.

For more details and information, talk to your licensed real estate professional.

A vast majority of individuals looking for a place to buy their second homes zero in on Florida because of its wonderful weather conditions and beautiful beaches. Sarasota in Florida happens to be the number one choice of hundreds of families looking to escape the harsh winter months in their states. This fact is corroborated by the increase in the numbers of Sarasota Fl condos for sale in recent times. Here are some compelling reasons why more and more families are buying their second homes in this tropical paradise.

Miles of stunning beaches

The white, sandy beaches of Sarasota are enough to catch the imagination of people searching for a home in Florida. Also, the proximity of Sarasota to the majestic barrier islands of Siesta Key and Longboat Key compel people to make Sarasota their home.

A vibrant art and culture scene

Sarasota is the best beach town in terms of enriching arts and culture environment. It boasts of art galleries, opera, and theater to make it a paradise for people fond of art. As a bonus, they also enjoy the world-famous Ringling Arts museum and live music concerts that are organized on a repetitive basis.

A haven for golf lovers

If you are passionate about golf, you will feel Sarasota like a haven. It has several world-class golf courses to help you indulge in your love in the most scenic landscape. Sarasota also has a plethora of tennis courts.

Features of shopping and fine dining

Sarasota happens to be a leading tourist destination. Therefore, you find this beach town dotted with high-quality shops and restaurants.

Downtown Sarasota Condos

Downtown Sarasota Condos

Plenty of options for fishing

Fishing is another leisure activity that you can enjoy to the content of your heart in Sarasota. Sarasota Bay has many places where you can catch lots of fish to enjoy fresh seafood.

Many accommodation options

Sarasota has a population of 55000 and a median home value of just over $262000, however most Downtown Condos start in the $500k plus range.  You can also enjoy a high monthly rent with your investment. There are beachfront properties, ranches, golf course villas, and affordable condos for sale in Sarasota. Also, unlike many other beach cities of Florida famous as party cities, you will find Sarasota a family-oriented beach town.

If you love what you read, it is prudent to contact a local realtor to help you find your dream home inside your budget from the many Sarasota Fl condos for sale.

The Quay Site Paln

The Quay

 

The Quay in Sarasota is underway.  Helping to redefine the footprint of downtown Sarasota, this will be one of the newest developments on Floridas’ gulf coast.  A vision of 10 distinct parcels; The Ritz Carlton Residences acting as an anchor for the overall development.  The Quay website says “Quay Sarasota is an entirely new vision – a 14-acre waterfront district that will offer a blend of luxury residential, upscale retail, boutique hotel, and state-of-the-art office space in a scenic waterfront setting of natural beauty, eclectic architecture and active public spaces.”  This will be a game-changer for Sarasota.  With the addition of The Bay, a waterfront park just to the north, the Quay is surrounded by The Van Wesel Performing Arts, The Sarasota Orchestra, and Art Center Sarasota.  Early plans call for 695 residential units, 175 hotel rooms, 38,922 square feet of office space and 189,050 square feet of commercial space for shopping and dining.  For a flyover animated look, see the video below.

GreenPointe Communities is the developer for this project, and they have a successful track record along the Florida coastline.  For more information and the overall plan for this project, visit The Quay website here.

Main St in Lakewood Ranch

Lakewood Ranch is a master planned community spread over both Manatee as well as Sarasota Counties in Florida. It is a massive community having an area of 31000 acres and home to dozens of neighborhoods and condominium communities. Lakewood Ranch is as famous for its beautiful landscaping as it is for well-designed homes. It is today considered one of the most desirable places to live in Florida.

Lakewood Ranch homes for sale showed an increase in sales in the first quarter of 2019. As compared to the first quarter of 2018, 7% more sales were recorded this year. In total, 417 homes were sold in the first three months which means nearly 5 homes sold per day in the first quarter of 2019.

As far as buyers are concerned, nearly 50% were from Florida while the rest of the buyers were from other parts of the country. Among Florida buyers, nearly half belonged to the local community. Lakewood Ranch is a big attraction for families as it is not only near Tampa but also far more affordable with median home values being much less what they are in Tampa and Miami.

It is not just a strategic location or affordability that attracts families to Lakewood Ranch. They are enticed by the presence of good quality shops, restaurants, schools, hospitals, and features entertainment and recreation. Lakewood Ranch is a master planned community with all amenities and a positive family atmosphere. Parents know their kids have plenty of activities when they are out for work. These are the reasons why Lakewood Ranch homes for sale are in such high demand among buyers.

Streets in Lakewood Ranch

Streets in Lakewood Ranch

Sales of homes in Lakewood Ranch have increased in most of the neighborhoods in 2019. However, special mention must be made of villages like Savanna and Mallory Park where sales of homes have increased significantly. Woodleaf Hammock, which is a relatively new community, and a village called The Isles have registered an impressive increase in the numbers of sales. Waterside, which is a village in Sarasota County, clocked 16 sales in the month of March, reflecting the interest of the buyers. Communities for seniors such as Esplanade and Lakewood National have also registered high numbers of sales in the same period.

If you are interested in Lakewood Ranch homes for sale, you need to contact a local and experienced realtor who can find you your dream home inside your budget.

Longboat Key Condo

Located in Sarasota and Manatee Counties of Florida is the coastal town of Longboat Key. Famous for its white sandy beaches, tons of palm trees, refreshing sea breeze, and fantastic weather conditions all year round, Longboat Key is considered a highly desirable place to live in Florida. Longboat key is both a town and a barrier island, south of Anna Maria Island between the Gulf of Mexico and Sarasota Bay.

The main attraction of Longboat Key is Gulf of Mexico Drive, a long and winding road that is bordered by dozens of shops and restaurants on both sides. This road is surrounded by beautiful landscape that includes huge expanses of water and hidden driveways. You will find a series of clubs starting from the southern tip of this barrier island in between many gated communities that reflect the elegant and relaxed condominium lifestyle of the residents living here. There are many Longboat Key condos for sale in these communities that are perfect for a dream life in this tropical paradise.

Median home value in Longboat Key is upwards of $700,000. but the cost of living is still affordable as median household income in this beach town is more than $100,000. It has a population of only 7000 and most of the homeowners live here only for a certain time period in a year. They enjoy a decent median monthly rent of close to $2500 from their investment.

Longboat Key is regarded as a luxury Gulf Coast golf resort community because of some world-class gold courses and 12 miles of stunning beaches. Waterfront properties offer residents a chance to enjoy golf and world-class shopping and dining facilities. The cool and relaxed lifestyle of Longboat Key attracts large numbers of retirees who come here to enjoy the scenic beauty and the warm and sunny weather conditions. However, it is a good place to live for families with kids too. You will find some very high-quality public schools in Longboat Key serving the educational requirements of the parents.

As far as Longboat Key real estate is concerned, it offers multiple options to you depending upon your budget and liking. These include wonderful estates, townhomes, and Longboat key condos for sale. No matter what your choice, you will enjoy living along the majestic Gulf Coast in this tourist beach town.

Take a look at the example below and imagine yourself here!

 

 

 

 

 

The Bay

The Bay has raised $8m in funding for the first phase of the new public park that is slated for Sarasota’s bayfront area.  The area encompasses 53 acres of prime waterfront grounds.  The first phase will create a 10-acre park starting at Hwy 41 and continuing along Boulevard of the Arts to the bayfront.  The Paterson Foundation has already donated $3m to the worthy cause and another $5m has been collected in private donations.

A sunset boardwalk on the bay is part of phase 1, along with the restoration of mangroves, and a public event area.  Groundbreaking is slated for the end of 2020, and a 20 year build-out is expected.

For up to date information, check out “The Bay Sarasota

Sarasota Parking Meter

Pay to park is now in Sarasota, so I thought I’d try it out because I needed a few pictures of the new Streetscape on Lemon Ave (and wow, is it going to be nice).  The metered spaces are designed to give you 10 minutes for free (not the pole meters), however I needed a little more time and bought 15 minutes for 25c.  There is also a phone app that you can use, ParkMobile, and you can extend time from your phone if you are not back to your car in time.  Check out the locations and rules here and don’t be fooled into paying during free time.  Parking rules are enforced Monday – Saturday from 10:00 am to 8:00 pm, free on city holidays and Sundays.

 

ABC7 Mark Boehmig

The effect of interest rates on Real Estate

Interest rates are still relatively low compared to the last 40 years.  In 1980 we purchased our first home and paid 15% interest on our mortgage, and as I look back at that purchase I’m still amazed. Our only concern at that time were the monthly payments;  that purchase was the perfect starter home for us.

My how times have changed…  Fast Forward 39 years to 2019 and interest rates are between  4.5 and 5% depending on several qualifying factors such as credit score, debt to income ratio, purchase price, and type of property (Condo, Single Family etc.).

Now that interest rates appear to have reached their low point in this cycle, the topic of rising interest rates is in the news again.

I was invited to a round table discussion at the local ABC News station, ABC7.  The expert panel consisted of  Richard Stern, Financial AdviserJerry Zivic, Consumer ReporterLeslie Swart, Mortgage Lender and myself, Mark Boehmig, a local Realtor with Michael Saunders & Company.

The topic of discussion, as you can guess, was about rising interest rates and the effect on the local real estate market.  So what are the actual effects of the rise in the interest rates?

This is the way I see it:

  • housing prices have been steadily rising for the past 8 years
  • mortgages have been tougher to qualify for
  • the government rules in place for mortgages have made the market more secure
  • interest rates have been very low for the past 8 years

With low rates and increasing housing prices, the federal government is slowly increasing the 10 year treasury bond yield, which increases the rate on money loaned to banks.  This will slow down the rise in home pricing, which keeps inflation in check.

What part of the sales cycle are we in?

Another thing to keep in mind, a 1% increase in interest rates equals a 10% decline in borrowing power.  To put this in monetary terms, if a buyer could previously qualify for a mortgage on a home with a value of $200,000. their borrowing power has now been reduced to $178000.

Real estate will adjust to these new parameters, therefore slowing the rise in housing prices.  As more inventory comes on the market the supply will increase, shifting the market from a sellers market, to equilibrium, then perhaps a buyers market.

As far as the Manatee and Sarasota counties of Florida are concerned, our market is a little different.  45-50% of our sales are cash.  How can this be?  Many people retire here.  They have sold their homes in other places and come here with cash!  Others come here buying second or third homes, and a majority of those sales are cash as well.

Keep these factors in mind if you are in the market to buy or sell property in the near future.  Having the knowledge of market conditions is important when the time comes.

The full panel discussion can be viewed here.