What’s A Pool Worth?

How to value a pool comes up a lot in my work with buyers and sellers. Putting in a new pool averages about $80,000 but appraisers do not value pools based on their cost. Typically, if a buyer wants a home with a pool, it is more economical to buy a home that already has a pool rather than add one. Since we are in Florida, one might think that pool homes would be in abundance. However, finding homes with pools is not as easy as you might think in St. Pete.

Right now, there are 766 single family homes for sale in St. Pete priced under $500,000. 84 of these homes have an in-ground pool. Furthermore, only 33 of these homes are not in a flood zone. I had two different appraisers gave me their guide for making home valuation adjustments. For a home priced at $250,000, one appraiser gives $8,000 – $15,000. If the pool has a screened enclosure, they add another $5,000. Another appraiser’s guide stipulates a $12,000 – $25,000 adjustment and also another $5,000 for a screened enclosure.

Working with buyers and sellers, I have had a sense that pools are reflecting a higher value to buyers in the St. Pete market than just a $15,000 adjustment, so I took a closer look at the statistics.

In the last 6 months (October 2018 – March 2019), 111 single-family homes with pools that aren’t in a flood zone sold under $500,000.

Data calculated on all homes recently sold under $500,000 with an in-ground pool:

Average sale price Average sale price/SF
       With pools – not in a flood zone  $299,000  $186.13
       With pools – in a flood zone  $329,000  $198.13
 Without pools – not in a flood zone  $204,798  $166.01
 Without pool – in a flood zone  $248,500  $178.oo

 

Pools homes definitely sell for more. Based on my analysis, in-ground pools add $50,000 – $80,000 to a home’s value.

This leads me to another point – homes in St. Pete that ARE in a flood zone sell for more. Obviously, waterfront property commands a higher price. However, many of the homes in a flood zone aren’t actually waterfront. Some of the nicer neighborhoods in St. Pete are close to the water. In those neighborhoods, you also find homes that were built later than their counterparts built in the 20s, 40s & 50s and these homes have larger square footage, garages and POOLS! The central parts of St. Pete tend to be older and were not built with pools.

Posted on April 1, 2019 at 11:08 pm
Michelle Anderson | Category: Home Buying, Real Estate Market, Selling Your Home, St. Petersburg

When Is the Best Time of Year to List a House in Pinellas County?

by Michelle L. Anderson, MBA, REALTOR, RE/MAX Metro

Most of the year, Florida enjoys an active real estate market. Unlike states to the north that are not active in cold winter months, Florida benefits from our fabulous winters and our snowbirds. The short answer to this question is that late winter – early summer are the BEST times to put a house on the market. But the only time I advise sellers to NOT list a house is the 2nd half of December through the first week of January. The reality is that real estate activity slows to a crawl during the holidays. However, at any given time there are lots of people who need to move and homes sell all year longThere are a few things to consider when defining what is the “best” time, because is it best to sell the fastest, or at the highest price or do these factors coincide?

I looked at the numbers for Pinellas County for 2014 – October 2018* to see exactly what the sales trend looks like by month. Below is a graph that shows the number of closed sales for each month. Keep in mind that homes that closed likely went on the market two months prior. The average days homes have been on the market in the past year is 26 days and on average, most contracts close in 30 days.

You will see that sales consistently spike in the spring and summer. They also consistently die down in the fall and have a short spike again right at the end of the year. I hypothesize the end of the year spike is due to people making purchases prior to the end of the year in order to qualify for homesteading or investors looking to acquire a tax deduction. Another factor may be people from up north looking to buy in time to enjoy their new home for the winter.

Number of closed single family home sales, Pinellas County Florida

 

Absorption Rate

The absorption rate is pretty much what it sounds like. It is the rate that listings are selling and it is calculated by dividing the number of closed sales by the number of active listings. A lower rate means that homes are selling slower (buyer’s market) while a higher rate means that homes are selling quickly (seller’s market). One of the highest rates in recent years was 44% in June 2016 and I can attest to encountering numerous bidding wars for homes at that time.

When the absorption rate is going up, sellers can list their homes at a higher price. However, when the absorption rate is declining, homes shouldn’t be listed at a higher price. In other words, a declining rate indicates that it isn’t a time to “push the market higher,” and that demand is decreasing.

Absorption Rate – Pinellas County Florida, Single Family Homes, real estate statistics

 

From 2014 – 2018, the absorption rate has been trending upward. The rate also seems to follow a similar pattern with the number of listings, the number of sales and the median sales price. Homes that are on the market over the holidays sit the longest and the absorption rate tends to peak for the year in the spring and summer.

Appraisals
Home appraisers do factor absorption rate into their valuations. This means that when the rate is climbing, they may add additional value to a home. However, when the absorption rate is declining, they are less likely to increase value for market factors.

Sales Price
While the median sales price has been trending upward at a high rate over the last few years, the trend is not a perfectly straight path. Below are some charts that show the median sale price by month. Interestingly, each year the highest median price for the year occurs in the spring/early summer and dips down in the fall with another small spike prior to the year end. This trend mirrors the trends of the number of closed sales, number of listings and days on market.

How much difference in price does it make? An article on CNBC says that on average, homes that sell at peak times sell for $1,500 more. The article also says that the best time to list homes in warm weather markets like Florida is March.

Median Sale Price, Single Family Homes, Pinellas County, Florida 2014-2018

Median Sale Price, Single Family Homes, Pinellas County, Florida 2018


Days on Market / Median Time to Contract

The median number of days homes were on the market prior to going under contract follows a similar trend with the longest average time falling around the holidays and beginning of the year and then declining until reaching a low point in early summer.

Median Time to Contract – Single Family Homes, Pinellas County Florida, Days on Market, 2014, 2015, 2016, 2017, 2018

Pinellas County, Florida Real Estate Statistics, January 2018 – October 2018

Want to know what day of the week is best to put a house on the market? Visit my previous blog: Best Day to List a Home

 


*Numbers as reported from the Pinellas Realtor Organization. Statistical calcualations and analysis conducted by Michelle L. Anderson

Graziosi, Dean. “What Is Absorption Rate in Real Estate and Why Is It Important?” Huffington Post 12/6/17 0

Olick, Diana. “Homes sell fastest during these two weeksCNBC. 3/2/2017

Posted on December 18, 2018 at 4:26 pm
Michelle Anderson | Category: Real Estate Market, Selling Your Home, St. Petersburg | Tagged , ,

HOW DO HURRICANES EFFECT THE ECONOMY?

eye of the hurricane

This question actually has many layers, because the answer is different when you ask, “How do hurricanes effect the economy in the short-term,” “the long-term.” Or, “How do hurricanes effect the national economy,” or “how do they effect the area that was impacted?”

SHORT-TERM
In the months following a storm, the local economy will initially see huge losses of wealth. But following that, thriving areas will actually see a bump when insurance checks are cut, and rebuilding takes place. Spending also gets shifted around regionally. People evacuate and spend money elsewhere. Hardware store, gas stations, grocery stores and hotels see increased business while local business are shuttered. The national economy sees a small dip in GDP.

LONG-TERM – NATIONAL ECONOMY
According to an article in Florida Realtor  “On net, storms tend to subtract from gross domestic product in the early months and add to it in later months – leaving the economy, on balance, with few overall effects after a year.”

LONG-TERM – LOCAL/REGIONAL ECONOMY
“Hurricanes impose huge losses of wealth and initially slow regional economies, but over time they can be a tonic that creates more prosperous communities,” According to Florida Realtor.

What the data shows here is that thriving communities rebuild, and often in a way that enhances the area and results in a better community. New buildings improve the area and are often built to better withstand acts of nature. “Some areas see a bump in growth from the rebuilding,” according to an article in the New York Times.

However, in poorer areas, most damage falls on the uninsured and rebuilding doesn’t take place. These areas may never fully recover.

Each storm and area has its’ own nuances. Was the damage mainly for flooding or wind? What percentage of the effected had insurance? How much damage occurred to the local industry, such as were oil refineries impacted? My short answer to a complex question is that in most cases, areas hit by hurricanes come out stronger in the long-run and so does our national economy.

For more information on this topic, read my Blog Post, “The Florida Keys 1 Year After Hurricane Irma.”

Sources:

Hurricanes make us poorer but don’t slow the economyFlorida Realtor, 9/26/18.

Hurricane to Cost Tens of Billions, but a Quick Recovery Is Expected,” New York Times, 8/28/17.

Posted on November 1, 2018 at 3:41 pm
Michelle Anderson | Category: Real Estate Market | Tagged , , ,

THE FLORIDA KEYS 1 YEAR AFTER HURRICANE IRMA

The Florida Keys were my home for 10 years. Specifically, I lived on Cudjoe Key at mile marker 23 which means it is right above Key West with the southernmost point being mile marker zero. Although I had been in St. Pete for several years when hurricane Irma hit in 2017, I watched the news as the damage unfolded with a sick feeling in my stomach. Despite that I had sold my former home there and closed my business, it all still felt like it was hitting home.

Key West was left virtually physically unaffected. Irma’s eye hit right over my old house in Cudjoe Key and spared the area to the west. The Lower Keys and Marathon were the most severely impacted, but damage was done all the way up to Key Largo.

Florida Keys Mangroves


INFRASTRUCTURE/BUILDINGS

“Almost 5,000 properties were damaged or heavily destroyed by Hurricane Irma when it made landfall at Cudjoe Key on Sept. 10, 2017. Rebuilding those lost homes has been extremely slow. According to county data, only 228 permits for demolition of properties destroyed or badly damaged have been submitted since the storm. Only 27 permits have been filed to rebuild single family homes and just three have been submitted for new mobile homes.”*

ENVIRONMENT
Immediately after hurricane Irma, the landscape of the Keys was drastically diminished with many downed trees and trees and shrubs stripped of leaves. I spoke to my good friend Loren Rea who lives in Sugarloaf Key (MM 16) and asked for her perspective on life in the Keys post-Irma. “It is amazing to see how much things have grown back,” said Rea. The tropical climate of the Keys has allowed for fast regrowth. This includes the mangroves which were affected but are also growing back.

In the Lower Keys and Key West, things look pretty normal. But in Big Pine Key, clean-up work is still in progress. Now a year later, groups still go out on organized weekend cleanups to remove debris from canals and mangroves. Keys residents have self-coordinated to do some of the clean-up themselves.

Some of the islands were shifted by Irma. Picnic Island, a long-time popular hangout spot for boaters, is now 3 separate islands according to Rea. Local fishing guides are out putting anglers on fish just as they were before Irma.

REAL ESTATE

The chart below of closed sales by month shows that most months after hurricane Irma have had a significantly lower number of closed sales than the preceding year. Prices, however, have continued to rise with the median price up 4.3%. The supply of inventory in the Keys is much higher than the rest of the country with 9.2 months compared to the average of 2.9 in most of Tampa Bay. Median time to sale in the Keys is 141 days compared to 65 in Pinellas County.

Monroe County, Florida Keys Real Estate Market, August 2018

Monroe County, Fl, August 2018 closed real estate sales in the Florida Keys

POPULATION
The labor force is now 11% smaller than it was before Irma. * Rea said that the effects of a decreased population and workforce are felt in daily life. Lack of staff in doctors’ offices, stores and restaurants is affecting service. The Keys population swells in winter-months with snowbirds and vacationers. But the year-round residents are those working in the restaurants, hotels and other tourist attractions. Post-Irma the Keys had a housing shortage. Many displaced due to damaged properties found temporary harbor in hotels but were pushed out once tourist season rolled around. Some residents just couldn’t withstand the loss of income felt around the hurricane. And some landlords capitalized on the housing shortage, and raised rents adding to the financial blow. The suicide rate in the Keys doubled post-Irma,** and every resident seems to have known a handful of people lost to it.

Every hurricane is unique just as the Keys are a unique place.


*Hudson, Tom: Health News Florida, “Rebuilding The Florida Keys One Year After Irma,” 9/7/18
http://health.wusf.usf.edu/post/rebuilding-florida-keys-one-year-after-irma#stream/0

**Florida Keys Cope With Suicide Spike After Hurricane Irma, http://health.wusf.usf.edu/post/florida-keys-cope-suicide-spike-after-hurricane-Irma

Posted on October 30, 2018 at 8:20 pm
Michelle Anderson | Category: Real Estate Market | Tagged , , , , ,

What Does a “Seller’s Market” Really Mean?

Back to Econ 101 and Supply & Demand –
Most of the nation is currently in a seller’s market and has been for some time. While it may seem obvious this means that the market favors home sellers over buyers, what does it really mean?

A seller’s market means that there are more buyers than sellers active in the market. The inventory of homes is low. This creates a competitive marketplace where homes sell at a faster rate and often get multiple offers on the same home. This is also contributing to the increase in home prices (think supply and demand). In a seller’s market, buyers have less bargaining power. Currently, a buyer may feel they don’t have an abundance of homes to chose from and in some cases are waiting for new homes to come on the market.

To gauge just how strong of a seller’s market we are in and what direction the market is heading, look at the month’s supply of inventory. The industry standard for a balanced market is 5.5 months of inventory. The statistics below are provided by Florida Realtors (Association).

Pinellas County (St. Petersburg/ Clearwater) – Median Sale Price & home inventory

Pinellas County Home Sales March 2018

The above chart shows that the median sale price for single family homes in Pinellas County have gone up 8.7% in the past year and the inventory has gone down 14.8%. The median sale price of condominiums and townhomes went up an ever greater amount of 14.4% and the inventory was down a whopping 17.6% over the prior year.

Pinellas County Real Estate Inventory – March 2018

To read more on a seller’s market, read my Blog “The Best Time of Year to List a House for Sale,” which explains the absorption rate and it’s correlation to seller’s and buyer’s markets.

Posted on June 12, 2018 at 6:33 pm
Michelle Anderson | Category: Home Buying, Real Estate Market, Selling Your Home, St. Petersburg | Tagged , , , , ,