Homeowners Are Staying in Their Homes Longer

by Michelle L. Anderson, MBA, January 29, 2020

The low housing inventory has been driving up home prices and creating a seller’s market. In December 2019, the inventory in Pinellas County dipped to a supply of 2.3 months – way short of a balanced market of 5.5 months. We are talking supply and demand here.

Supply of Housing Inventory

Source – Florida Realtors

 

One reason for the low inventory is that homeowners are staying in their homes longer than they did previously. Reasons may include longer lifespans and changing lifestyles of the baby boomer generation, homeowners wanting to capitalize on a rising market or changes in consumer’s mentality following the past housing bust of 2007-2008. From 2001 – 2008, Americans held their homes for an average of only 6 years. According to an article in the Wall Street Journal*, “More homeowners staying put has helped cause housing inventory to dwindle to its lowest level in decades, which has also helped push up prices on homes for sale. Adjusted for population, the inventory of homes for sale is now near the lowest level in 37 years of record-keeping.”

The good news is that we may be seeing a shift. In 2018, the nationwide average was 13 years, which shifted down to 10 years in 2019*. In Florida, the rate is lower – 8 years. Florida homeowners likely hold homes for a shorter period because they are bought as 2nd homes, bought later in life, or are purchased by those who come from other states and later decide to return to their state of origin.

Conventional thought has been that a homeowner should hold their home on average at least 5 years to break even. This number fluctuates with the market. Currently in St. Pete, the average break-even point is at 3 years. From this perspective, I think it bodes well for the financial health of Americans that they are staying in their homes longer. If in homeowner doesn’t hold their home up to the break-even point, they may have actually been better off renting. To calculate break-even points by area, down-payment and home price, this online calculator can be used.

Housing Inventory Turnover
Another way to analyze housing inventory trends is to calculate the inventory turnover rate. This rate can be useful when comparing neighborhoods within an area and what the expectation for new homes coming on the market may be. It is a way to determine if a neighborhood’s residents tend to stay put.

The neighborhood turnover rate is the percentage of homes in a neighborhood that sell each year. The rate is calculated by dividing the total number of homes in a neighborhood by the total number of homes that sold in that year. I calculated the turnover rates for a few St. Pete Neighborhoods:

Central Oak Park – 12% (of 1,727 homes on North Streets)
Historic Kenwood – 8.3% (of 814 homes)
Historic Old Northeast – 8.3% (of 534 homes)
Broadwater – 21% (of 378 homes)
Old Southeast – 16% – of 247 homes

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*National Association of Realtors, How Long Do Homeowners Stay in Their Homes, Jan. 8, 2020
*Wall Street Journal, “People Are Staying in Their Homes Longer—a Big Reason for Slower Sales,” Nov. 3, 2019

Posted on January 29, 2020 at 10:02 pm
Michelle L. Anderson | Category: Home Buying, Home Ownership, Real Estate Market, Selling Your Home | Tagged , ,

Squaremouth Comes to Central Oak Park Neighborhood

Squaremouth headquarters St. Petersburg, FL

Central Oak Park has an exciting new neighbor in one of its architectural treasures. I went to visit the new location of Squaremouth at 4355 Central Avenue recently to find out exactly what’s going on.

Squaremouth is an insurance technology company. They recently relocated from downtown St Pete to their new location that was formerly the Redeemer Engelical Lutheran Church. This development is favorable for Central Oak Park for several reasons. The existence of a progressive tech company bodes well to the future development of our Central Avenue corridor. Squaremouth is also doing some much-needed renovations to the property while still maintaining the existing structure and its Spanish character.

Rumor has it that there were several other bidders for this property that posed a likelihood of demolishing the current structure and building a new modern structure. I for one am glad that Squaremouth was the winning bidder given their plans for renovation and restoration of this beautiful 23,000 SF building built in 1950.

Squaremouth view from Central Avenue

I spoke to Meghan Moncrief, Marketing & Sales Director, about their plans for the location which include a new roof (all 23,000 SF!$!) and restoring the open courtyard area and balconies (as shown in the below photo). The pews are being donated to a church in Haiti. The existing beautiful stained-glass windows are being donated to a church in Cambodia and replaced with windows that allow more light. They also have plans to make a community area and coffee shop that will be open to the public. That means that Central Oak Park residents will have a coffee shop that we can walk to!

open courtyard

open courtyard

Balconies are being restored

Squaremouth is the largest travel insurance shopping engine that allows consumers to compare travel insurance policies from every major provider in the United States. Using their online comparison engine and over 60,000 customer reviews, travelers can search, compare, and purchase travel insurance. Travel insurance policies can cover trip cancellations or medical coverage while traveling. The Squaremouth workspace is characterized as an open workspace with comfortable chairs where employees move around in the workspace. Their culture is described as Google-like, with beer taps and games. Work schedules for their 35 employees are very flexible and vacation is encouraged.

Meghan said that after the renovations are done, Squaremouth wants to become more involved in the community. I told her about the Central Oak Park porch parties and hinted that Squaremouth would be a good location for one!

Currently, Squaremouth’s largest community initiative is their Thank You Campaign. Squaremouth employees search for 20 outstanding customer service providers in St. Pete and surprise each with $1,000 in cash, and an additional $10,000 to the overall winner. The winner this year was Melissa Wolf from 3 Daughters Brewing. Read more on this campaign here.

As a neighborhood, let’s welcome them and embrace what the future holds for this property, Squaremouth’s prosperity and our progressing community.

Squaremouth open workspace

Squaremouth gameroom

Posted on October 29, 2018 at 2:48 am
Michelle L. Anderson | Category: St. Petersburg | Tagged , , , , , ,