FLORIDA IS THE BIG WINNER AS THE WEALTHY MOVE OUT OF NORTHERN STATES

Roughly 5 million Americans move from one state to another annually and some states are clearly making out better than others. Florida and South Carolina enjoyed the top economic gains, while Connecticut, New York and New Jersey faced some of the biggest financial drains, according to a Bloomberg analysis of state-to-state moves based on data from the Internal Revenue Service and the U.S. Census Bureau.

Connecticut lost the equivalent of 1.6% of its annual adjusted gross income, as the people who moved out of the Constitution State had an average income of $122,000, which was 26% higher than those migrating in. Moreover, “leavers” outnumbered “stayers” by a five-to-four margin.

Bloomberg’s analysis included all 50 states and the nation’s capital to provide a fuller picture of aggregate income flows from migration. About 10% of the population moves annually, or about 35 million people, according to the Census Bureau. Most moves are within the same county.

Florida posted a net income influx of nearly 3% of the state’s adjusted gross income in 2016. South Carolina, Idaho and Oregon were also among the largest gainers in the interstate shuffle.

“Florida’s powerhouse economy continues to churn out new jobs, retiree migration to Florida is on the rise, and millennials are coming into their prime home-buying years,” Brad O’Connor, chief economist for Florida Realtor, said in a report before the trade association’s annual summit.

Bloomberg’s tally also included analysis by absolute net gain and loss of income.

New York’s annual net loss was the highest, with a net $8.4 billion leaving the state. Exiting incomes of $19.1 billion were replaced by people who brought in $10.7 billion less in income. Illinois and New Jersey were next with net outflows of $4.8 billion and $3.4 billion, respectively.

Those three states also had three of the four highest proportions of outbound versus inbound residents last year, according to the United Van Lines, the largest U.S. household goods mover.

Florida was the top financial magnet, reeling in $17.2 billion more than it lost, about seven times the amounts netted by each of the runner-ups Texas, Washington and South Carolina. The Sunshine State was the No. 1 recipient of the wealth exodus from 18 individual states — with New York, Illinois and New Jersey combining to contribute about $8 billion to Florida’s income base.

While long a haven for retirement, Florida’s effort to lure Wall Street executives has gained traction thanks to a provision in the federal tax law passed by the Trump administration that hits residents of high-tax states by putting a lower cap on state and local tax deductions.

Florida is also one of seven states that collect no income tax. The others are Alaska, Nevada, South Dakota, Texas, Washington and Wyoming. While New Hampshire and Tennessee don’t have a state income tax, they do collect taxes on dividends and income from investments.

Billionaire hedge fund manager David Tepper, once ranked as New Jersey’s richest resident, moved his main address and the headquarters of Appaloosa Management LP to Florida a few years ago. Real estate mogul Barry Sternlicht told employees of Starwood Capital Group that the firm’s headquarters will shift from Greenwich, Connecticut, to Miami Beach by 2021.

Having surpassed New York’s population in 2014 to be the third largest in the nation, Florida continues to siphon off the wealthy.

The average gross incomes of people moving to Florida from 10 states and Washington, D.C. exceeded $100,000, with those from Connecticut averaging $253,000. That far outstripped those of Florida natives who migrated to the reciprocal states.

“Job growth, lower costs of living, state budgetary challenges and more temperate climates” are the driving factors behind migration, Michael Stoll, a professor at the University of California at Los Angeles, said in separate study by United Van Lines.

Business formation can benefit from positive migration, too. Many of the states with the biggest income inflows from migration also lead in new business creation including South Carolina, Florida and Tennessee.

Bloomberg.com May 24, 2019

Home Values - Appreciation Stabilizes

The percentage of home price appreciation on a year-over-year basis has decreased each month for over a year. The question was how far annual appreciation would fall. It seems we may now have the answer.

In a recent post on the National Association of Realtors’ Economists’ Outlook Blog, it was revealed that Realtors are starting to sense that home values are beginning to stabilize and that we may see appreciation beginning to accelerate again:

“About 3,000 REALTORS® who responded to NAR’s February 2019 REALTORS Confidence Index Survey had more optimistic— although modest— home price growth expectations over the next 12 months. Respondents expect home prices to typically increase by 1.9 percent nationally, up from 1.4 percent in the January survey.”

The thinking that home appreciation has bottomed-out was also confirmed in two additional housing reports recently released:

CoreLogic Home Price Index – The analysts at CoreLogic increased their projection for home appreciation for the next twelve months to 4.7% as compared to the 4.6% they projected in their previous report.

The Home Price Expectation Survey – In the 2019 first quarter survey, the nationwide panel of over one hundred economists, real estate experts, and investment & market strategists increased their projection for home value growth in 2019 to 4.3% compared to the 3.8% increase they had projected in the fourth quarter of 2018.

Bottom Line
Agents working the business every day, one of the premier data companies in the real estate space, and one hundred housing experts all agree: home price appreciation has ended its decline and looks to be stabilizing… and may even accelerate.

Keeping Current Matters April, 2019

Why An Economic Slowdown Will NOT Crush Real Estate This Time

Many of us, particularly the Millennials and, to a lesser extent, the younger range of GenXer's, relate recessions with a home ownership catastrophe. Actually, the Great Recession was a rare event in the historical relationship between the two. History can be instructive-if you know it. Having been knee-deep in the real estate world through all the recessions noted below  I can vouch for the reality of the analysis and conclusion. Home ownership remains a steady and reliable wealth builder throughout time.  -- Brian

Last week, the National Association for Business Economics released their February 2019 Economic Policy Survey. The survey revealed that a majority of the panel believe an economic slowdown is in the near future:

“While only 10% of panelists expect a recession in 2019, 42% say a recession will happen in 2020, and 25% expect one in 2021.”

Their findings coincide with three previous surveys calling for a slowdown sometime in the next two years:

1. The Pulsenomics Survey of Market Analysts
2. The Wall Street Journal Survey of Economists
3. The Duke University Survey of American CFOs

That raises the question: Will the real estate market be impacted like it was during the last recession?

A recession does not equal a housing crisis. According to the dictionary definition, a recession is:

“A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

During the last recession, prices fell dramatically because the housing collapse caused the recession. However, if we look at the previous four recessions, we can see that home values weren’t negatively impacted:

• January 1980 to July 1980: Home values rose 4.5%
• July 1981 to November 1982: Home values rose 1.9%
• July 1990 to March 1991: Home values fell less than 1%
• March 2001 to November 2001: Home values rose 4.8%
• 
  

Most experts agree with Ralph McLaughlin, CoreLogic’s Deputy Chief Economist, who recently explained:

“There’s no reason to panic right now, even if we may be headed for a recession. We’re seeing a cooling of the housing market, but nothing that indicates a crash.”

The housing market is just “normalizing”. Inventory is starting to increase and home prices are finally stabilizing. This is a good thing for both buyers and sellers as we move forward.

Bottom LineIf there is an economic slowdown in our near future, there is no need for fear to set in. As renowned financial analyst, Morgan Housel, recently tweeted:

“An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way, but, statistically, highly unlikely. Could be over before you realized it began.”

5 Signs You’re Ready to Buy a Vacation Home

You've just returned from a trip to the beach. You ask yourself: Why should I continue to pay rental fees when I could own a vacation home and rent it out? Unless you're fairly wealthy, you'll need to make sure you can commit to buying a seasonal home before you start shopping around. 

Here are five indications that you're ready to take the plunge:

1. You can afford one
Can you afford to own a vacation home? If the answer to that question is yes, that's probably the most obvious sign that buying a seasonal home is something you should consider. You never want to buy a home that will leave you drowning in debt.

Remember, the purchase price is only part of the cost of owning a vacation home. You'll have to pay utility bills, maintenance fees and insurance premiums. And depending on where your home is located, you could also be responsible for paying homeowners association fees.

To decide whether you have enough money in the bank for a vacation home, ask yourself the following questions:

• Do you have emergency savings (at least three to six months' worth of take-home pay)?
• Can you make a 20 percent down payment?
• If you have kids, have you already put aside enough money for a college fund?
• Can you still put away enough money for retirement?
• Have you paid off your existing home?
• Have you calculated the potential return on your investment?
• Does it fit in with your long-term investment strategy and financial goals?

Everyone's situation is different. If you can answer yes to most of these questions, there's a good chance that there's room in your budget for a vacation home.

2. You've done your research
If you've done your homework, that's another good sign that you're prepared to purchase a vacation home. When you're visiting an area that might become the location of your future home, there's nothing wrong with enjoying yourself; however, doing your research and taking the time to understand what the surrounding area has to offer is important. You'll also want to make sure you visit during different parts of the year. That way, you can get a feel for what it's like to live there during different seasons.

Think about the short- and long-term implications of buying a seasonal home, especially if you plan to spend plenty of time there. When you retire, for example, the amenities included in a vacation home may take a backseat. Having access to a hospital and activities that improve your overall health and well-being may be critical.

3. You know what's happening in the market
If you can keep up with what's going on in the housing market, buying a vacation home might make sense. If you analyze changes in sales prices, you'll be able to time your home purchase carefully, and you'll be able to make the most appropriate decision based on seasonal demand, which drives home prices.

In 2016, new, single-family home sales reached their highest level in a decade, although there was a decline in home-buying activity among vacation homebuyers, according to a survey from the National Association of REALTORS® (NAR). A rising demand for housing and a shrinking supply of options has pushed up prices, making it more difficult for many people to purchase a vacation home. In 2016, the median vacation-home sales price was $200,000, up from $192,000 the previous year.

4. You have a plan
Buying a seasonal home could be worth considering if you know how you're going to use it. Maybe you view the home as an investment property that can serve as an additional source of income. Maybe you've decided that you're going to find guests online through a website like Airbnb or Vacation Rental by Owner (VRBO).

Keep in mind that if you intend to rent out a vacation home, you'll need to think about advertising and logistics. You'll need photos of your rental property and a detailed description of its amenities. You'll also need a rental agreement and a plan for how you're going to accept payments. Will you use a service like Venmo or PayPal, or ask guests to mail you a check?

You'll probably need to hire someone to clean your home and check for signs of damage and theft before new guests arrive. Hiring a property management company might make your life easier, but agencies often charge between 25 and 50 percent of your rental income.

5. You're prepared to pay taxes
Rental income must be included on both state and federal tax returns. If you are renting out your vacation home or even a portion of your vacation home (e.g., a bedroom), you might be considered an innkeeper. That means you might be expected to collect the same lodging taxes that hotels collect and make payments to your county, city and/or state. In Fort Lauderdale, Fla., for example, among tourists who pay for lodging, a 12 percent tax is due.

For many people, the decision to purchase a vacation home is serious. If you decide to take that leap of faith and you already have homeowners insurance, make sure you find out whether your current policy will cover a second home. Also, if you intend to rent out the property, consider purchasing rent loss insurance. It covers the loss of rental income following natural disasters and catastrophic incidents.

Homes More Affordable Today Than 1985-2000

Rising home prices have many concerned that the average family will no longer be able to afford the most precious piece of the American Dream – their own home.

However, it is not just the price of a home that determines its affordability. The monthly cost of a home is determined by the price and the interest rate on the mortgage used to purchase it.

Today, mortgage interest rates stand at about 4.5%. The average annual mortgage interest rate from 1985 to 2000 was almost double that number, at 8.92%. When comparing affordability of home ownership over the decades, we must also realize that incomes have increased.

This is why most indexes use the percentage of median income required to make monthly mortgage payments on a typical home as the point of comparison.

Zillow recently released a report comparing home affordability over the decades using this formula. The report revealed that, though homes are less affordable this year than last year, they are more affordable today (17.1%) than they were between 1985-2000 (21%). Additionally, homes are more affordable now than at the peak of the housing bubble in 2006 (25.4%). Here is a chart of these findings:

What will happen when mortgage interest rates rise?

Most experts think that the mortgage interest rate will increase to about 5% by year’s end. How will that impact affordability? Zillow also covered this in their report:

Rates would need to approach 6% before homes became less affordable than they had been historically.

Bottom Line
Though homes are less affordable today than they were last year, they are still a great purchase while interest rates are below the 6% mark.

Keeping Current Matters July 5, 2018

Happy Memorial Day - Live Grateful

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It's Season on Useppa Island

It’s that time again.  T’is THE SEASON!
And, Useppans are returning to Useppa Island to enjoy “Paradise without a Passport” for the winter months.  At least, half of them.  The other half of our residents are Florida residents.  Happy Hour the past two Friday’s have been raucous; welcoming back friends we haven’t seen in months.

Hurricane Irma’s winds shredded this island…but only it’s foliage -- NOT the structures or Spirit of Useppa. Owners and other willing souls, along with the two General Contractors on the Island, worked to first clear the Island, then restore operations as quickly as possible.  While a little rough around the edges, the Island is back in business.

Oddly enough, Real Estate activities have popped back to pre-storm levels. Wish us luck on the three contracts written and presented.  

Have you seen our newest listing?  Belvedere Cottage, on the South end of Useppa with an incredible 270 degree view of both sunrise and sunset…and all that water!!  How good can it get?  Asking $2,250,000.00  4/4, elevator to all three levels, a view from every window, beautifully landscaped, hurricane hardened, 18,000 lb. lift, expansive private dock for a 50’ watercraft.  Come see us.  We are excited to show you Belvedere Cottage!

Property Details

It's Time to Buy that Vacation Home - New Prices on Useppa Island

Stunning views and a dock at your door. Beautifully appointed and ready for a new owner.

508 Useppa Island - Now offered for $569,000 with 3 bedrooms, 2 baths and 1,800+ square feet.  View Property Details

Set Your Watch for Island Time - Great Price Reductions

Get the updates and stunning views from 524 Useppa Island. Now priced at $549,000

Located in a quiet cove with 3 bedrooms, 2 baths and 1,508 square feet.  View Property Details

Don't Miss Your Opportunity for a Private Island Escape

Beautifully remodeled 3 bedroom with stunning water views, luxurious appointments, a dock at your door and 1,600 sq. ft. Now offered for $599,000

506 Useppa Island
Property Details

If you've been waiting for the Perfect Home at the Perfect Price...don't delay.

Romantic Hideaway with a Private Beach on Useppa Island

123 Useppa Island Just Listed

Romantic Hideaway beautifully updated with a private beach. Surrounded by tropical foliage and boasting hardwood floors, wood-burning fireplace, open kitchen, breakfast bar and granite, vaulted ceiling and spacious screened decks offering amazing waterfront views.

Offered for $750,000
Property Details

Spacious attached Villa offers 2 bedrooms and 2. 5 baths in an inverted floor plan with the main living areas on the second level.

Improved Price - 124 Useppa Island

REDUCED BY $61,000 - NOW $899,000

A classic American bungalow on the high ridge that forms the center of Useppa Island, this comfortable home includes the essence of Useppa Island living: broad water views of Pine Island Sound, a front door right on the historic Pink Promenade, and stairs that lead down to the beach. 

This is Private Island living at its finest with granite kitchen and bath counters, tile and carpet flooring, 3 bedrooms, 4 baths and a study. Off the entry foyer is a grand living-dining combination with soaring ceiling. The study and kitchen are also on the entry level. 

The kitchen features Jenn-Air cooking appliances as well as all stainless steel. A pass-through window allows convenient service to the screened porch that extends the length of the dining and living areas. Centrally, an open staircase leads up to the large master suite, with two walk-in closets, a small office overlooking the main floor, and balconies with views both east and west. Central stairs down from the foyer lead to 2 bedrooms with private baths, both opening onto a full length screened porch, and then stepping out to an open deck. The home is wrapped by age-old Live Oaks and palms, with orchids dripping from the branches.

Stunning Views - 306 Useppa Island - Price Reduced

BIG PRICE REDUCTION
Custom built on a quite cove with a protected dock and stunning views. Offered fully furnished with 3 bedrooms, 3.5 baths, Chef's kitchen and golf carts included.

3,652 Sq. Ft.
Private Dock for 40' craft
NOW $1,225,000
Property Details

Offering plenty of space for family, friends and entertaining, features include an expansive screened porch, fireplace and hardwood floors. The spectacular second floor master suite boasts an office, water-view bath and whirlpool, sauna, huge walk-in closets and private open deck.
 

The Wait is Over - Make Your Move to Useppa Island

524 Useppa Island - Just Listed
Located in the southern and quiet cove of Useppa Village, enjoy captivating water views to the Useppa yacht basin and beyond. Hurricane-fortified from the party-wall to the windows, this light-filled attached Villa island escape provides quality materials indoors and out, 3 bedrooms and 2 baths. $575,000 Property Details

Featuring private decks from the bedrooms, along with an updated kitchen and baths in the open plan surrounded by tropical foliage. 

A sturdy HardiePlank exterior and maintenance-free decking keep your waterfront lifestyle easy. Complete with updated systems of electrical and plumbing, hurricane-resistant doors and windows, garage, paver drive and walkways, community dock and unsurpassed amenities