In the Know: What are the hottest selling homes? And top PGA earner sells Naples estate
Phil Fernandez
A growing number of Americans are plunking down money to buy a second home, and that's been a major driver in Southwest Florida real estate.
They are aided by equity gains in their primary abode due to soaring prices, historically low mortgage interest rates, improved savings accounts and a flexible work environment.
Sales of existing homes in counties with at least a 20% share of vacation homes rose by 24% on average in 2020, more than double the 11% increase in counties that don't have a large volume of vacation homes, National Association of Realtors stats show.
In other words, vacation housing is the hottest segment of the hot pandemic market, according to USA TODAY.
An NAR analysis found that Southwest Florida has more vacation homes by far than anywhere in the nation. Lee County at the top had 90,792 as of 2019, ahead of the 62,643 at No. 2 Cape Cod's Barnstable, Massachusetts and No. 3 Collier's 58,406. They're even ahead of No. 7 Osceola's 35,591, outside the gates of the Peninsula's economic big dog, Disney World.
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Lawrence Yun, NAR's chief economist, said he expects vacation homes to remain a popular segment of the housing market given the continued work from home policies of many companies.
It's certainly playing out as we kick off the decade. Vacation home sales rose by nearly 17% in 2020 and by 33% year-over-year between January and April 2021.
Mortgage applications for second homes soared 84% year over year in January, according to Redfin, a full-service real estate brokerage where sellers pay a discounted fee.
“It’s been a pretty massive financial windfall for homeowners and a number of those homeowners have turned to buy second and vacation homes,” said Taylor Marr, lead economist at Redfin. “The changing nature of work really makes the economics of owning a vacation home much more viable if you can get more use out of it by working out of it for a week or two out of the year.”
Second homes are considered a good investment by some.
“It's now much easier to buy a second home and have part of that cost offset by short-term rental," Marr said. “That's also created more demand for these second homes for those who can afford them.”
More local real estate records
A large percentage of buyers in Collier are showing they can certainly afford whatever kind of domicile comes their way.
Cash sales in May accounted for 58.4% of the closed transactions, according to the Naples Area Board of Realtors.
In its newest report, NABOR said cash buyers continued to create challenges for competing customers who required financing. It took an average of 90 days for a home to go from list to contract about a year ago, but in May, the average days on the market was reduced to 43 days, a 52.2% decrease. Lee County's all the way down to 30 days, according to the Royal Palm Coast Realtor Association.
Tight inventory and buyer demand pushed the NABOR median price nearly $100,000 higher in a year to $433,500. The jump was even bigger for single-family, going from $426,518 to $598,800.
In Lee, the overall median hit $311,000, a year after it was $239,950. Single-family: rocketing to $365,000 from $262,963.
Homes in both counties were being sold at 99.1% of the list.
As a previous In the Know analysis found, metro Naples ranked 24th in the country in 2020 on median prices, ahead of places like Washington D.C., Colorado Springs and Hilton Head Island, according to an In the Know analysis..
Florida's now fourth on highest housing costs, ahead of New York and behind No. 1 California, Hawaii and Oregon, according to statistics that we reported last month from WalletHub finance analysts.
And that spells problems for would-be first-time buyers of primary homes. WalletHub found that those top two states are also among the places with the lowest rates of home ownership.
While the home ownership rate in Florida is still above the national average, it has decreased almost 6% since 2005 through the first quarter of this year, according to iPropertyManagement, which advises landlords.
With NABOR inventory down 79.1 percent, from 6,177 homes a year ago to 1,290 now, its analysts in their report are projecting continued price increases in 2021.
"We’re in for a period of low sustained inventory,” said Budge Huskey, CEO of Premier Sotheby’s International Realty. “But even when demand begins to level off – perhaps in the second half of the year, as is historically the case – our area will not see any real decline in prices because new fundamental values for our market are being set today, and they are not likely to trend down again.”
CEO Sheryl Palmer of Taylor Morrison, which is building various Esplanade communities in Collier and Lee, had similar thoughts this past week.
"The overwhelming demand is something that will be with us for years to come,” Palmer told CNBC.
NABOR also had its best May ever in recorded closed sales. The 1,618 is 164% better than 2020 in the early stages of COVID-19 and 36% improvement from two years ago.
And there's more in the pipeline, with 1,710 pending in May, according to NABOR. Lee County exceeds that by a lot: 3,930.
Because of at least a couple of factors drawing potential future homeowners, the question is whether there will be a return "to more normalized buying behavior" in the traditionally slower upcoming months, the NABOR report said.
What might be ahead
As summer vacations begin, the tourism surge Southwest Florida saw in May had been expected to continue as travelers stranded at home during the shutdown are escaping to the beaches in numbers not seen before.
Collier, for example, saw an all-time high in visitors in May, and at the same time, the Lee County Port Authority reported a record-breaking 946,366 passengers through Southwest Florida International Airport.
The second part of the equation is that all the housing and tourism records are being set even though overseas travel has been largely non-existent. In the past, active buyers from around the world have helped fuel local sales.
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That may soon materialize anew, depending on what happens with coronavirus, which also could be picking up steam again. More than 99% of its U.S. recent deaths involved the unvaccinated, the federal government said this past week.
And my colleague Liz Freeman reported Wednesday night that a somewhat unnecessary outbreak looms as the highly contagious Delta virus variant that has led to new shutdowns around the planet takes hold in the Sunshine State and beyond.
Earlier that day, Japan declared a new state of emergency, banning spectators from attending this month's Olympics, where American swimming star Michael Andrew plans to show up unvaccinated.
On Thursday, with the latest data, WalletHub financial analysts rated Florida one of the least safe states during the pandemic. It found the Peninsula has the fifth highest death rate and sixth highest hospitalization rate.
“I’m pretty concerned,” said Dr. Michael Teng, a virologist and associate professor at the University of South Florida’s College of Medicine in Tampa. “If you have a functioning set of lungs and no immunity, this virus will find you.”
Nearly 16,000 new coronavirus cases were detected in Florida in the week ending with the July 4 holiday weekend, a 35 percent increase over the week before. Florida also saw 1,963 new hospitalizations in that period, an increase of 18 percent, according to the Tampa Bay Times.
More up-to-date info isn't regularly being made available to Floridians after Gov. DeSantis eliminated state daily transparency reports for citizens. And part of what's not being shared at all with the public is information about the deadlier strains, including Delta.
On top of that, Florida could be underestimating its cases as it is. Testing volume has dropped, said Jay Wolfson, a USF professor of public health.
Wolfson said too many are ignoring the negative outcomes from the virus, such as what happens to COVID-19 “long haulers” who suffer significant long-term effects, illustrating yet another risk, besides death, of not vaccinating.
“It's going to create, we think, the possibility of a large flare of chronic disease in the population which is going to require lifetime attention,” Wolfson said.
Well under half of the state's residents are fully vaccinated. Wolfson said pockets of the population with low vaccination rates allow for new variants to develop.
“That unvaccinated population can help to create a new strain of the virus, which, in the worst case, would be immune to the vaccines that we are using now, which appear to be working against the effects of the viruses,” Wolfson said.
Following federal guidance, many merchants have asked unvaccinated customers to wear a mask when entering their businesses. Because of the rising Delta infections, the World Health Organization has urged even the fully vaccinated to continue wearing masks indoors and practice social distancing as the globe surpassed 4 million COVID deaths this past week.
"Everyone should continue to socially distance and wear masks," said Florida State University's David F. Merrick, director of Emergency Management and Homeland Security Program and Center for Disaster Risk Policy. "These simple measures will enable our communities to handle the back half of this pandemic as vaccines roll out."
Sizzling Stricker: Stroking and selling
Here's someone else who's found the Southwest Florida real market to be hot: Top golf pro earner Steve Stricker, who's sizzling on a hot streak of his own on the links.
We previously reported in the Naples Daily News that Stricker, winner of the recent Collier PGA Tour Champions' Chubb Classic and Bridgestone Senior Players Championship in Ohio two weeks ago, was moving from Southwest Florida.
"The market is good. You've got to take advantage of the market at the time, and it's really good down here," said Stricker, 54. "It happened so fast."
Now, public records show what the 2021 U.S. Ryder Cup captain made on his 5,754-square foot vacation estate, and it's well more than the $690,000 from those two victories.
Purchased for $3 million in 2018, the Quail West spread on the second hole fairway of the Lakes Course sold for $4.2 million to international private equity honcho John P. Oswald.
Just throw that on the pile of the $44.9 million Stricker has collected on the PGA Tour, 17th all-time, about $30,000 behind Davis Love III on Saturday.
The records list 13860 Williston Way as Naples. It's actually in the Lee County portion of the gated development with about roughly 25% of the 500-plus houses that can be accessed just off Bonita Beach Road, east of I-75.
For now, Stricker, who is considering Central Florida for an investment, has been hanging full-time in his native Wisconsin, telling the Associated Press that he's focused on refining his putting.
"I've been working with it at home quite a bit back and forth," Stricker said.
Not that he has anything to prove on or off the course. His success speaks for itself, with another solid showing at this weekend's John Deere Classic, less than three hours away from home.
Based at the Naples Daily News, Columnist Phil Fernandez (pfernandez@gannett.com) writes In the Know as part of the USA TODAY NETWORK, which supplemented this report. Please support Democracy and subscribe.