Did You Know?
* Though just 17% of the U.S. population is 65 or older, United Van Lines reports that seniors in that age group completed 29% of all its moves in 2020. Sumter County, Florida has one of the highest levels of inbound migration of seniors in the U.S. thanks in large part to the Villages, a sprawling retirement community more than 50 miles northwest of Orlando. But large cities are seeing an influx of older people seeking the excitement and variety/volume of entertainment/restaurant options. (WSJ)
* In the 4th quarter of 2021, investors bought 18.4% of the US homes that were purchased, a record high. And possibly one of the biggest drivers of housing inflation? Higher purchase prices + higher rents = essential demand for higher wages. (FT)
* The median monthly payment on a new mortgage is now taking up a much larger share of a typical consumer’s income. It jumped 8.3% in February compared with January. The average rate on the 30-year fixed mortgage shot significantly higher yesterday, rising 24 basis points to 4.95%. The quicker-than-expected rise in rates has weighed on demand for mortgages and refinancing loans. With both rates and prices considerably higher, the median mortgage payment is now more than 20% higher than it was a year ago. And so is pricing in some parts….Now comes the question: are incomes that much higher to sustain this? (CNBC)
* The average bonus paid to securities industry employees in New York climbed 20% to a record $257,500 for 2021, the largest increase in bonuses since 2009. Securities industry jobs make up just 5% of private sector roles, but accounted for 18%, or $14.9 billion, of state tax collections in the 2021 fiscal year. (CNBC)
And read these recent articles: (more…)
Time to consider an Adjustable Rate Mortgage
As 30-year mortgage rates (FRM) continue their recent vertical ascent, it is worth considering an Adjustable Rate Mortgage (ARM).
Here are the latest rates:
ARMs got a bad name in the boom that contributed to the Great Recession, but as in so many different situations, that was the result of lax – or no – underwriting standards – think liar loans – and loans with adverse features such as negative amortisation – payments so low, initially, that the loan balance increased over time.
All that changed with the passage of the Dodd-Frank Act in 2010. (more…)
Bonita Springs Market Summary February 2022
Read these articles:
The Federal Reserve and Mortgage Rates
Naples Beach prices drop 47%? Not so fast
Naples YTD February: sales plummet, prices soar
The Great Resignation’s Effect on Florida Real Estate
Federal Reserve: “Make me responsible…. but not yet”
Guide to Buying and Selling in Southwest Florida
Naples Year End Market Report by Location and Property Type
Fort Myers Beach 2021 Market Report
Bonita Springs 2021 Market Report
Sanibel/ Captiva 2021 Market Report
Andrew Oliver, M.B.E., M.B.A.
Real Estate Advisor
m: 617.834.8205
Andrew.Oliver@Compass.com
———-
www.TheFeinsGroup.com
www.OliverreportsFL.com
Compass
800 Laurel Oak Drive, Suite 400, Naples, FL 34108
————–
Licensed in Massachusetts
www.OliverReportsMA.com
The Federal Reserve and Mortgage Rates
As expected, the Federal Reserve (Fed) increased its Fed Funds Rate (FF) this week by 0.25% to 0.5%, the first increase since 2018.
What does this mean for mortgage rates and why are they rising? The FF rate affects the lending rate for credit cards, auto loans, adjustable rate mortgages, all of which are impacted by banks’ Prime Rate, which moves with the FF rate. Fixed Rate Mortgages – the typical 30-year mortgage – have a longer life and their benchmark is the closest Treasury security, which is the 10-year (10T).
Five charts explain the factors driving mortgage rates. In all cases the numbers are at the dates that the Fed has changed its FF since 2015: 9 increases followed by 5 decreases before this week’s rise. Because the purpose of this article is to show the link between FF, FRM and 10T the dates shown are only those on which the FF rate changed. Bear that in mind when looking at the charts below – they do not attempt to show all the price movements in between the dates shown. (more…)
Sunday Snippets – Did You Know?
* In 2020 we had a run on toilet paper and paper towels in the USA….. empty shelves and rationing followed as demand far outstripped supply. Now in northern Italy, the supermarkets have been cleared of pasta and pharmacies in Norway are sold out of iodine tablets! In 2020, toilet paper, paper towels, tissues, hand soaps, etc had price increases around 20% or more in one year! (FT)
* The world added 153 billionaires last year, or 3 billionaires each week, to a total of 3,381, according to the Hurun Global Rich List released Thursday. China led with 1,133 billionaires, followed by the U.S.’s 716, and India’s 215. The TOP 10 are all worth more than $100 billion…5 years ago none were. The average age of the billionaires was 64; 120 of them are under 40, and 269 are self-made women billionaires, nearly 66% from China. (PENTA)
* A home in Laguna Beach, CA features a rather interesting “amenity”…. on the property is a fire suppression system with six cannons connected to city water lines. The system senses the temperature of the land and if there is a fire, water will automatically spray from the cannons and alert the fire department. (WSJ)
* Just 10 seconds of idling uses as much gas as restarting your car, in case you wish to cut your gas costs…. Edmunds.com did a comparison of various gas-saving measures. To test the cost of idling, testers drove two cars for 10 miles—they stopped 10 times and idled for two minutes each time. Then testers drove the same route but turned off the engine and restarted at each of the 10 stops. They estimated nearly 20% fuel savings on the restarted cars.
U.S. Takes Step to Regulate Cryptocurrency Market
Cryptocurrency home sales barely have a toehold, and a new exec order from Pres. Biden may change the rules. The order suggests regulation and a U.S.-owned version.
Over 100 countries are exploring or piloting Central Bank Digital Currencies (CBDCs) – a digital form of a country’s sovereign currency.
“The rise in digital assets creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier, but also has substantial implications for consumer protection, financial stability, national security and climate risk,” according to the Executive Order.
The Order lays out a national policy for digital assets across six key priorities: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.
Executive Order key points
Sunday Snippets – Did You Know?
* Tech meets TREES? 🤔 Trees help with stormwater attenuation, store carbon, improve air quality, provide shade for humans and offer habitats for wildlife…..but as the climate changes, some trees are not surviving/thriving in their current habitat and arborists are identifying the trees that will survive and thrive going forward. i-Tree is a state-of-the-art, peer-reviewed software suite from the USDA Forest Service that provides urban and rural forestry analysis and benefits assessment tools. (FT)
* The median age of a US homebuyer has risen from 31 in 1981 to around 45! If we average leaving home around the age of 20 and rent for 25 years before buying, that equates to $300k lost to rent if your rent is $1,000/month….. $600k if it’s $2,000/month…..and $ 1million if you average $3,333/month! (FT)
* Gen Z — those born between 1997 and 2012 — has become the most active faction in the housing market, flocking to major cities that some claimed were doomed in the pandemic. Manhattan’s social scene and job climate led to a 63% jump in Gen Z rental applications year-over-year. Zoomers made up 27% of Manhattan renters last year, up from 17% the year before as they contend with an increasingly tight market. Other major cities to see a spike in its share of Gen Z renters include San Jose (52%), Los Angeles (45%) and Irving, Texas (37%). Gen Z is the only generation to have its activity surge in the past year. There were 220,000 more rental applications from Zoomers in 2021 than the year before, making up 27% of the rental application market, trailing only millennials (45%). So yes, I was not hallucinating when I noticed everyone around me getting younger and prettier in Manhattan! (RENT CAFE)
* The number of unincorporated self-employed people in the U.S. reached 10 million in February, or 400,000 more than when the pandemic began. It soared as high as 10.3 million last summer. Being a self-employed, independent contractor has pro’s and con’s! (WSJ) (more…)
Naples YTD: sales plummet, prices soar
The combination of undiminished demand and greatly diminished inventory have had the inevitable consequence in the first two months of 2022: prices have soared 25-50% from a year ago, while sales have dropped by similar percentages ( read Naples Beach prices drop 47%? Not so fast.
Here are the numbers broken down by property type and location within Naples: (more…)
Naples Beach prices drop 47%? Not so fast
In today’s Naples YTD: sales plummet, prices soar the median price of Single Family Homes sold in Naples Beach (see map below) in the first two months of 2022 as $926,000, down from $1.76 million in 2021, as sales dropped from 185 to 102.
The reason for this anomaly is that a very high share of 2022 sales occurred in the $500-$1 million price range, as shown in this chart: (more…)
The Great Resignation’s Effect on Florida Real Estate
The Great Resignation’s impact on home construction means that the value of Florida residents’ homes could see another double-digit price rate increase in 2022, according to a recent report from the CE shop: The Great Resignation’s Effect on Florida Real Estate.
This impact comes on top of a 70% decrease in inventory since the start of the pandemic:
Disappearing inventory
The Great Resignation — the name given to the enormous wave of workers quitting their jobs over the past year — is making headlines nationwide around 33 million Americans have quit their jobs since the spring of 2021.
Why Are Americans Leaving Their Jobs? (more…)
Andrew Oliver joins the Feins Group at Compass
I am excited to announce that I have joined the Feins Group, one of the premier groups operating in Naples as these numbers show:
I bought my house through Jon Feins and would be delighted to help you buy yours.
Andrew Oliver, M.B.E., M.B.A.
Real Estate Advisor
Andrew.Oliver@Compass.com
————–
www.TheFeinsGroup.com
www.OliverreportsFL.com
Compass
800 Laurel Oak Drive, Suite 400, Naples, FL 34108
m: 617.834.8205
Licensed in Massachusetts
www.OliverReportsMA.com
Federal Reserve: “Make me responsible…. but not yet”
With apologies to St. Augustine the gist from the release this week of the minutes of the last meeting of the Federal Reserve Open Market Committee (FOMC) was that, yes, inflation is worse than we expected, and yes, we need to raise interest rates and, yes, we need to sell some of our huge portfolio of Treasuries and Mortgage-Backed Securities, and we will …soon…I promise.
“Participants observed that, in light of the current high level of the Federal Reserve’s securities holdings, a significant reduction in the size of the balance sheet would likely be appropriate,” the meeting summary stated.
The minutes show concern about inflation and financial stability though members urged “a measured approach” to tightening monetary policy. FOMC members noted that “inflation was beginning to spread beyond pandemic-affected sectors and into the broader economy.”
No kidding. (more…)