Florida Real Estate

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$130 million was just spent on the purchase of a senior living community in Boca Raton.  The purchaser – Welltower – is a Toledo health care REIT and made the deal as part of a larger $368 million package for an additional four senior communities in Arlington, Charlottesville, Silver Spring and Virginia.

 

And Ziegler Financing Group (ZFC) closed on the $94.3 million refinancing at Gainesville’s not-
for-profit Village (sponsored by SantaFe Senior Living).  According to ZFC

 “By taking a unique approach to the Section 232 board and care criteria, this loan accomplished the largest refinance of a single-asset senior housing community in [the Department of Housing and Urban Development's] portfolio.”

ZFC said the unlicensed units met the Department of Housing and Urban Development Board’s care criteria since there has been an increase in care services from many independent living residents at reduced levels of senior living.

Welltower and Ziegler might be forced to encounter some additional expenses with this purchase.  Gov. Rick Scott is about to receive a bill that will require Florida’s assisted living communities to buy backup generators and have fuel on site. According to Florida’s Department of Elder Affairs, his would come at an additional $243 million price tag over the next five years for operators.

 

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In this video the National Association of Realtors offers some insight into home sales in the South Florida region at the end of 2017.

Optimism comes in the form of 60% of renters feeling this to be a good time to purchase a property; 76% of homeowners seeing the environment as positive for selling and 52% believing the economy to be improving.

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When making an investment in real estate, it is vital to check out locations first.  Currently – for those looking to put  money into US real estate – Florida seems like a pretty good bet.  With a market share of 22 percent, Florida seems to be the top choice for foreign purchasers.

Global investment in property purchases is increasing.  According to the Florida Realtors Trade Group, this has been encountered most notably over the last 12 months with around $24.2 billion for July 2017 – a staggering $5 billion more than July 2016.

In first place (within Florida) came Miami-Fort Lauderdale-West Palm Beach, cornering 52.6 percent of the market share, which was .5 percent more than last year.  So far this year, international investors have increased by $24.2 billion within the state (which is quite a bit more than last year’s number of $19.5 billion). This also accounted for the highest amount spent on this investment nationwide.

Miami has attracted a lot of interest from Colombian investors who have led the real estate purchasing search for 7 consecutive months.  Foreign investors have followed suit, selecting the area due to its amenability for businesses, top-level educational opportunities, prestigious  waterfront location and global/domestic transportation access.

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home-designNow is a good time to buy a Florida home.  Well, now rather than in six months’ from now as opposed to six months earlier.  It looks like house prices are going to be increasing and it seems that single family rental properties in Broward County have real investment potential.  Moving over to Miami-Dade however, the situation is not as good since despite the fact that there has been a jump in prices there, mortgages seem to have a higher risk. Investors are rather encouraged to look at Palm Beach County for retail or restaurants.  However in that region, there is a scope of empty properties which creates a swing vote in home prices.

Of course, home moves occur much more frequently during the summer months everywhere you go, so Florida is not singled out in that way.

The status of Florida housing is impacted greatly by the increase of baby boomers since many retirees move there.  Since there are approximately 2 million of these per annum, the situation of both risk and opportunities presents itself.

Then there is the home one chooses itself.  According to Bill Ennen, a custom builder at Fort Myers, there are many areas housebuyers should consider before making the purchase.  Too often people have a list that is simply not long enough:  it is so much more than the amount of bedrooms/bathrooms and location, he says.     The way they should do this he says is by looking at their lifestyle. For example, do they often entertain guests?  Do they need a formal space?  Do they need large bedrooms for extra beds?  Do they have small kids and need a garden?  Do they need a comfortable spot for just the two of them to chill, etc.

When you answer these questions you’ll see for example if you want the dining room to be separate from the kitchen as you might not want guests seeing you preparing food.  However, it should be noted that even in an open space situation where the two are connected, a wall can often be built.

Anyway the point is that when purchasing a home, lifestyle is an important issue to take on board.

 

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homesWhat kind of sustainable housing options are there in Florida?  Well, the “dome homes” that can be seen coming out of the Florida coast (that look a bit like they come from a cult) could have completely fitted into that category.  According to the project visionary’s grandson Lee, these were “totally self-sustaining.” When Bob Lee designed them they got their power from solar panels and had backup generators as well.  They are now seen as forward thinking and a design toward a more sustainable way of life.

Another potential in the state are the proposed “tiny houses,” a concept created by Rick Kearney with the idea of aiding the affordable housing plight common in Tallahassee. The concept he is proposing, is a $7.8 million concept he’s calling “The Dwellings.”  What this is though is a tiny house community that will have homes between 250 and 400 square feet on 30 acres next to Wolf Creek.  These will absolutely be sustainable, being built with shared areas and powered by solar panels.  There will be communal spaces which will have on-site community services, a community center, greenhouse and organic garden.

There is a lot of potential in Florida for sustainable housing.  And with Kearney’s new proposal, a lot of low income families’ problems could be solved.

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mortgageThere have been some good reports in the Florida housing industry recently, resulting in a reduction in all cash closed sales and a boost in median prices. Data from Florida Realtors has shown that the market is steady and that the supply of homes for sale is stable. The numbers speak for themselves: condominium sales increased 10.9 percent and home sales price 13.7 percent. According to Florida Realtors president, broker and co-owner of Veissi & Associates, Matey Veissi, this is a great opportunity for sellers who will end up with close to 94 percent of their asking price. Even though mortgage rates are slightly on the rise, they “remain historically low,” which results in added buying power for consumers.

And then there are the Florida flippers. According to a new report from Trulia, there has been quite a significant increase in homes being flipped throughout the state. In 2015, 6 percent of homes sold were flips. This is an increase from a few years ago, as for example, in 2014, 4.9 percent of homes were flipped in Palm Beach County and the following year this had increased to 6.3 percent.

And then at the end of last month, Stock Signature Homes hosted Open Houses throughout its Southwest Florida regions. This gave potential homeowners the opportunity to check out stunning furnished models as well as move-in ready homes. For those who are coming from a different state, this open house day let them become familiar with amenities in the area as well.

Overall though, things are looking up for Florida real estate. As Chief Economist at Florida Realtors, Dr. Brad O’Connor concluded, "2015 was a very strong year in terms of sales growth in Florida's single-family home markets, thanks to a sales surge that began in the fourth quarter of 2014 and lasted through the third quarter of 2015. In each of the first three quarters of 2015, we observed double-digit percentage increases in sales on a year-over-year basis. Year-over-year growth in 2015's final quarter was more subdued, signaling a possible return in 2016 to more stable rates of sales growth.”

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propertyAccording to Freedie Mac, “the South Florida housing market continues to rate favorably on a national housing scale.” Indeed parts of the region actually went up by 14 percent from last year.

In addition, year-over-year, the entire state of Florida came out as “the most improving state,” enjoying a percentage increase of 14.47. Oregon came in next at 12.2 percent so this record for Florida is most noteworthy.

For those concerned about what will be in 2016, Florida Atlantic University professor Ken Johnson (who is also a real estate economist) said “in a worst-case scenario, South Florida prices will fall flat in 2016, and homes will sit on the market longer. [Even with this] people would still be able to sell their homes. It wouldn't be like it was in 2008 when you woke up and couldn't sell your home for any reason."

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old-peopleAmerican House is developing a construction community for seniors in Bonita Springs, in Florida. The American House Senior Living Communities, architected by Progressive Associates contains 88 one- and two-bedroom units, and also two-bedroom apartments with a den. The entire project is valued at $13.8 million.

According to Joe Passkiewicz, Senior VP of Development this project will be providing “really upscale independent senior living….[featuring] , concierge service, dining facilities and a large veranda that offers seating for outdoor dining, with a kitchen/grill [and more].” There will be an outdoor swimming pool, putting green and bocce ball court, exercise room, spa and massage room, full restaurant service, and covered parking over 26 acres close to the Imperial River.

But there could be some issues with this for seniors. According to some studies, in 2016, rising costs of living could make things very difficult for people in South Florida, especially the elderly. Because of the following three factors, senior citizens will get hit hard in their pockets. These are: there will be no annual increase in Social Security benefits; there is likely to be an escalation in the deductible for their Medicare coverage; and many Medicare beneficiaries will have to pay a lot more in their monthly premiums.

So while this Florida home looks fantastic, it just might be one of the cases in which the old adage of ‘too good to be true,’ can be put in place.

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homesAn additional 1.5 million new residents and nearly .5 million new homes have reached the coastal communities of Florida over the last ten years. According to a report put out by The Miami Herald, the good news is that construction companies there are responding to the hurricanes and building accordingly. In other words, even though there are so many more properties, there shouldn’t be the worry about construction and natural disasters. Indeed, since the enactment of the building code of 2002 – which was a response to Hurricane Andrew – new structures have to undergo stringent inspections and are erected with shatter-proof glass and straps which bolster the connection between roof and walls.

However, one thing hasn’t changed. There clearly isn’t that much additional confidence in the added measures taken vis-à-vis construction. It appears that insurance premiums remain at the same level, with homeowners in the region paying around twice the amount of the national average.