Home prices approach pre-crisis peak!

Home Prices

Home prices rising.

Black Knight’s latest Home Price Index report, based on May 2015 residential real estate transactions, showed that the U.S. HPI is now just 6.5% off the June 2006 peak of $268,000, and up over 25% from the market’s bottom.
Fort Myers Home Prices have been slowly climbing but not at this level.
The Black Knight HPI combines the company’s extensive property and loan-level databases to produce a repeat sales analysis of home prices as of their transaction dates every month for each of more than 18,500 U.S. ZIP codes.
The Black Knight HPI represents the price of non-distressed sales by taking into account price discounts for REO and short sales.
According to Black Knight’s report, the HPI now rests at $251,000, up 1.1% over the previous month and up 5.1% over the previous year.
New York led gains among the states, seeing a 1.8% in month-over-month appreciation.
Among the metro areas tracked by Black Knight’s report, Janesville, Wisconsin saw the greatest monthly appreciation at 3%. That is unusual

Latest home price index shows shrinking gap between 2006 and 2015

Real Estate Bidding Wars Return

NEW YORK – July 21, 2015 – Bidding wars are returning to U.S. real estate markets with too few homes for sale.
A number of events led to the current lack of homes for-sale inventory, including an unexpectedly sluggish rebound in home construction. At the same time, millions of homeowners aren't listing their home because they don't believe they'll qualify for a new mortgage, or that they cannot afford the costs associated with a sale.
As of May 31, there were 2.3 million existing U.S. houses on the selling block – enough inventory to last 5.1 months at the current sales pace but shy of the six to seven months of supply that typically signals a balanced market.
But in more than 33 percent of the 300 biggest metro areas tracked by Realtor.com, listings have been on the market a median of less than two months, indicating a rapid turnover as demand for residential properties exceeds supply. Those include such large markets as Dallas and San Francisco along with smaller markets like Vallejo, California, and Kennewick, Washington.

Even in the face of a tight home listing inventory, some economists hope renters will add demand to the sector as rent increases continue, prompting many to pursue ownership. Apartment rents have climbed almost 16 percent in the United States since 2010, calculates Reis Inc. Article courtesy of florida realtors.

Hertz is trying to sell its former Park Ridge, New Jersey, headquarters building and also the former Dollar Thrifty headquarters in Tulsa, Oklahoma. Some of the former Dollar Thrifty headquarters jobs are moving to Estero while others are going to Oklahoma City. Estero home and condo values have soared.
Hertz is also spinning off its Hertz Equipment Rental into a separate company that will be based in leased space in Bonita Springs, where Source Interlink was once based.

“Today’s filings are an important step forward, and our attention is now on realizing Hertz’s potential,” said John Tague, Hertz president and CEO, in a statement. “While much work remains, I thank the Hertz team for their efforts to bring our filings up to date while continuing to remain focused on our customers and our future.”
The company also announced progress on its capital allocation, cost savings, capacity plans and fleet refresh.
“Progress on our initiatives to reduce capacity, meet our fleet refresh targets and capture cost savings will be evident in the third quarter, which we believe will be an inflection point for the year,” Tague said. “And of course, we expect those benefits to become progressively more visible in 2016.”
For the first quarter of this year, the company saw $2.45 billion in total revenues, compared to $2.54 billion during the same period a year ago. It had $70 million in net income loss for the quarter, compared to $69 million in the same period a year ago. Diluted loss per share was 15 cents for the quarter, the same as a year ago. Courtesy of News-press

Bonita Beach building New Homes

The small home on Bonita Beach was nestled among towering trees, barely visible from the road or the beach. Built in 1962, it was one of the oldest homes around; a quaint little cottage with three bedrooms, two bathrooms and 1,244 square feet of space. Matching yellow quilts adorned the beds in the guest room. Wicker furniture with thick floral cushions filled the living room. A wide porch overlooked the Gulf. Bonita Springs Homes for sale
Now this home is gone. This month a bulldozer crushed the home into splinters and dump trucks carted the debris away. It’s a scene that is becoming more and more common along Bonita Beach where the small homes are slowly disappearing and larger and larger ones are taking their place.
This home was unusual not just for its age and quaintness, but for the property. The home at 26850 Hickory Blvd. had 100 feet of property on Bonita Beach. The property is legally divided into two 50-foot beach lots. The two contiguous lots are in the middle of Hickory Island, in a wider section of beach that has never needed renourishment. It is also not close to the public beach accesses. All those features helped it sell in March for $4,074,000. That seems like a lot of money for a home that was torn down. But empty lots on that beach are now selling for $2 million and the mansions being built there for $5 million. Since this house was on two lots, that could be $10 million in homes.
“All the old houses eventually, in the next 8-10 years, will be all gone and Bonita Beach will be nothing but a wall of three-story beautiful homes,” said Robert Jensen, listing and selling agent for Bay Point/Bluebill Realty, who sold the home in March. “It has to do with the growing wealth of Americans and their desire to live right on the beach in Southwest Florida.”
“Compared to living right on the beach in Barefoot or Vanderbilt or Parkshore, Bonita Beach is a bargain,” he said. “The two lots that I sold with the house on it were the first to sell for more than $2 million for 50 feet.”
The value of this piece of paradise has greatly fluxuated over the years. The first time it sold was in June of 1995 as a mother-to-son transfer for $275,000. It sold again in April 2001 for $3.2 million.
“In 2005 the owner turned down a $6 million cash offer,” Jensen said. “In 2010 he wanted to sell it, and I told him he couldn’t get the $6 million, so we put it on for $4.2 million. It took from 2006 until 2015 to get back to $4 million. That’s the game the speculators have. That’s the roller coaster that they ride.”
There’s also the high cost of living on Bonita Beach Waterfront. At one time the taxes on that little house were $55,000. The 2014 tax assessment shows taxes for that house at $34,033. Then there is the high cost of insurance for living less than 100 feet from the Gulf.
Denny Grimes, president of Denny Grimes & Co. Inc., expects to see a lot more tear-downs in the future due to those high costs.
“I can give you my opinion as to what will happen over time and that will be the cottages will all be replaced,” Grimes said. “It’s not only about highest and best use, but practicality. Cottages are most likely not at proper base flood elevation nor built to current building codes. I believe the cost of insurance or the lack of coverage will extinct the charming cottages.”
“Another irony, the government likes to restrict development to protect the natural environment, yet they create rules that cause our historic and charming structures to be destroyed,” Grimes concluded.
Jensen said it wasn’t taxes or insurance that prompted the owners of the little cottage to sell.
“The owner had bought it for the kids and grandkids, but after a few years the kids and grandkids never came down,” Jensen said. “So they just sold it because it was just one thing they never used. All the beachfront houses — they are all third and fourth and fifth homes for people. It’s not a second home. It’s a third, fourth or fifth.”
After a while many homeowners realize they don’t use the house enough to justify the high taxes. Taxes run up to $60,000 to $70,000 a year on the big Bonita Beach homes. Even the smallest cottages are costing more than $30,000 a year in taxes.
“It is a great spot if you are going to use it, but what happens is you go up and down the beach most of these houses are never used,” Jensen explained. “So after a while the cost of the taxes are not worth it and that’s why they sell.”
“The only way to get the highest and best use out of it is to develop it,” he continued. “Buy it for $2 million and put a house on it and sell it for $5.4 million, and you are making more money than the owner that has held that land all these years. You have to consider all the old houses as tear-downs.” Courtesy of News-Press.