Anna Maria Island real estate has been bucking the national real estate trend for many months now. The number of transactions for 2009 was an average year for Anna Maria Island and 2010 was a banner year for the island real estate. Most importantly, Anna Maria Island real estate for 2010 saw a jump of 30%+ real estate transactions as compared to an average real estate year. 2011 is off to the same start as 2010 with almost 125 transactions so far for the fiscal year according to our multiple listing service.
This means that the month of April saw almost 50 real estate transactions with more than 75 properties still in a pending mode so the back log of contracts on hand is healthier than usual. The reason I pay so much attention to transactions is that I feel it is the demand side of the macro real estate market for Anna Maria Island. Appreciation for real estate is simply based on Supply and Demand. The number of transactions for Anna Maria real estate are consistently 30% above an average year. So demand is very strong. Supply which is number of properties for sale is actually at a 5+ year low. Now for the most important indicator of real estate health. How is supply and demand as they relate to each other and more importantly how does that metric relate to the past.
Below is that very chart. The key points; real estate inventory is at normal historical levels. The demand however is very high therefore making the number of months on hand very low and correlating back to levels of real estate crazy years in 2005. Please don’t get me wrong, this is not a license to go out and buy whatever is on the market. It is more important than ever to choose a great real estate professional that will educate you on our market and provide the pro’s and cons of each property as it relates to your expectations. Take a look at the chart below and as always call or comment with questions.
The Wall Street Journal has written a fabulous article regarding the demand on investment homes, more specifically vacation rentals. The story correlates well to Anna Maria Island Real Estate. Vacation Rentals account for a great
Wall Street Journal
deal of Anna Maria Island Real Estate transactions. While I am unaware of the exact percentage of vacation rentals on Anna Maria I estimate nine out of ten real estate buyers request rental income estimates prior to purchasing.
The article basically explains how investment property transactions are on the rise and in some areas they are seeing minimal appreciation. Anna Maria City, Holmes Beach and Bradenton Beach are great examples of the trends the Wall Street Journal is writing about. Anna Maria Island saw about 235 transactions in 2009 and in 2010 we say 317. This data comes from MLS. So, the island has seen a 38% increase in transactions as compared with 2009. Even more impressive is when you take into account an average transaction for Anna Maria Island is around 230 transactions so 2010 frankly was a fantastic real estate year.
The law of economics talk about supply and demand. Supply is much lower as compared to the height of inventory for sale on Anna Maria Island. Anna Maria saw around 900 + properties for sale while we finished 2010 with just over 500 properties for sale. Supply is low and our Anna Maria Island transactions are way up. Most analysts would agree that as number of months of inventory for sale is a leading indicator of appreciation of property for sale.
For more information on the Wall Street Journal article visit here. As always, if you have any questions regarding Anna Maria Island Real Estate send me a note or give me a call.
If you have been to Anna Maria Island and are interested in real estate there are some great buy’s available on Anna Maria Island. One that comes quickly to mind is a boutique resort in Bradenton Beach. Tortuga Inn Beach Resort is located in Bradenton Beach on Anna Maria Island just a quick stroll from the beach. Cool off in the pool or just a quick hop, skip and jump away you can walk the gorgeous white sandy beaches.
Tortuga Beach Inn
Tortuga Beach Resort offers fabulous value with on-site services to handle your every whim. Better yet, the properties range in price from $325,000 for a 1,200 square foot two bed, two bath condo to $375,000 for a 1,400 square foot two bed, two bath luxury apartment. Did I forget to mention that not only do you have a home away from home but the apartments are rented out to offset operational costs as well as some debt service. Call or email me for more information as I have historical rental performance on the Tortuga Inn and I think you will be surprised with how little a Tortuga Beach Resort apartment costs per month. Email – Larry(at symbol)IslandReal.com
Purchasing or selling your home is one of the biggest transactions of your life. For that reason it’s very important to get it right. Statistics show using a National Realtor will minimize physical, mental and fiscal pain. That moves you into at least a 50-50 shot that your real estate professional will maximize your equity purchase or sale. See the 8 questions below to help find the top 5% real estate sales professionals on Anna Maria Island. By the way – you guessed it, all my answers are yes except for #8. It may sound corny but Real Estate is my life…See below, I hope the questions help! Email Larry.
#8) Is Real Estate your full time job?
#7) Is your office open 7 days per week?
#6) Is your office on Anna Maria Island?
#5) Do you live on Anna Maria Island?
#4) Do you own on Anna Maria Island?
#3) Do you have your own website?
#2) Can I find your website by typing Anna Maria Island Real Estate?
#1) Do you hold any leadership roles in the Anna Maria Island Community?
As if the real estate industry is not hurting enough, the Environmental Protection Agency (EPA) just made it a little
Lead Guidelines
tougher for property investors all across the United States. The EPA has enacted a guideline in section 402 (c) (3) of the Toxic Substances Control Act (TSCA) that requires qualified contractors to work on property constructed prior to 1978.
The TSCA focus much of their attention on lead-based paint hazards that are created by renovation, repair, painting activities, etc. The new guideline is set to go effective April of 2010. The targeted housing is mostly related to children facilities as well as Commercial buildings constructed prior to 1978. Unfortunately there is one other area that is affected that plays a very large part of Anna Maria Island Real Estate. Buildings which are planned to be leased require a certified trained general contractor. This of course correlates to larger costs for Anna Maria Island property investors.
If you plan to paint very small areas of your Anna Maria Island investment property then you are probably fine. Check the guideline to be sure at last check it was 6 square feet per room. So the bottom line, if you are planning to purchase an investment property that will require significant renovation, plan to rent it and was built prior to 1978, then be sure PRIOR to purchasing you receive a few quotes to be sure your renovation doesn’t cost significantly more than you planned. The extra cost is yet to be determined but keep it in mind.
For more information on the exact language used by the EPA visit the informational page on this new guideline. Of course if this all seems overwhelming then please feel free to contact me for more information. I would love to help find your “peace” of paradise on Anna Maria Island, Bradenton, Sarasota or Longboat Key or just answer a few questions. For that matter contact me for any Florida area as my work with the best of the best Real Estate professionals in the Florida Leadership Academy will allow me to refer you to someone that will be sure to help!
Anna Maria Island real estate saw an average year of transactions. Inventory dropped to 500 properties which depending on which statistics you review is about 10% higher than normal. Bank related real estate for sale continues to be around 5 -8% of our total inventory which continues to be much lower than the nation wide average. Since 2006 an average Anna Maria Island property has lost an estimated 25-30% of their value. The great news for Anna Maria Island is over time the value of our properties appreciate at 10%. Supply and Demand is what drives prices so this entry focuses more on inventory changes as compared to 2008. More charts of Anna Maria Island real estate statistics will follow to show 2009 results. Stay tuned and review the inventory statistics below.
Below is Anna Maria Island real estate inventory as it stood the end of the calendar year 2009.
Anna Maria Island Inventory
Compare the breakdown of 2009 inventory to 2008 inventory and you see there is not much of a change.
Anna Maria Island Inventory - 2008
So lets talk details… Anna Maria Island Condominiums for sale in 2008 was 213 and at the end of 2009 the total condos for sale was 181. Anna Maria Island single family homes for sale at the end of 2008 was 263 and 2009, 242. Anna Maria Island Multi-families for sale for 2008 was 48 and the end of 2009 was 37. Vacant lots for Anna Maria Island went up by one to 38 for 2009.
As you can see, the Anna Maria Island real estate market saw a healthy reduction in inventory for sale. In total about a 10% reduction in real estate inventory for sale. A nice reduction when the rest of the nation has gained real estate for sale. The information above was taken from MLS. If you have further questions don’t hesitate to call.
If you have been reading my blog you have seen a few posts explaining some statistics that shows the start of a real
Potential Condo Development
estate comeback. It is well documented that resort areas are the first to return to healthy property appreciation. We are starting to see the mainland real estate pick up in transactions and a recent large transaction produces good news. As reported by the Herald Tribune in Bradenton, Florida :”Perico Project picked up by Canadian Firm.” St. Joes began a 352 acre project on Perico Island. Perico island is just across the draw bridge from Anna Maria Island. It’s a couple orange throws from Anna Maria Island. The Perico Island project will have a positive impact on Anna Maria Island. Originally the project was stopped mid-2007 by St. Joe’s due to the adverse Real Estate conditions nationwide and in the Bradenton, Florida area. Minto, a family owned company with operations in Ottowa and Toronto has built more than 65,000 homes in its 54 year history and looks like they will build a few more on Perico Island. For more information on the purchase visit the Herald Tribune web article.
While the macro economy started turning a corner in the second quarter, Anna Maria Island continues to wonder what all the hub bub is about. Let’s first discuss some banking statistics then move to our little “peace” of paradise.
Per government regulators the amount of United States banks that shut down in 2009 was triple the number that failed in 2008 calendar year. The majority of the banks that have failed in 2009 were smaller, regional banks. Of course the Federal Deposit Insurance Corporation (FDIC) covers limited losses to consumers and CNN reported the FDIC has paid out $446 Million in 2009.
The FDIC still has plenty of money although they estimate in the next five years they will pay out more than 70 billion due to the failure of various financial institutions. So far the FDIC has used 20% of their reserves in place.
Anna Maria Island continues to see average transaction years although the rest of the country has not quite caught up yet. So why all the talk about the National Banking situation. Well our “peace” of paradise has been affected by banks providing money for loans on real estate. Single family homes on Anna Maria Island as a primary or secondary property is no problem in regards to finding money from large or small banks. Condominiums as well as Condo-Hotels are another story. A Condo-Hotel is a property that rents nightly or has a staff member on the property to provide accommodation services.
So why bring this up? Some condo prices continue to slip due to the difficulty buyers are having regarding borrowing money for condos. If you have CASH you can pick up some phenomenal condominium deals on Anna Maria Island. Take Palm Isle Village Resort for example. Pick up a two bedroom that grosses more than $35,000* per year in rental income for less than $350,000! Unbelievable! Give me a call for more Condo investment deals!
Anna Maria Island Square Foot Trends
The above chart shows a continue slippage in square foot values for single family real estate. Keep in mind that Anna Maria Island has seen a disproportionate number of smaller single family properties sell which is adversely affecting the average square foot values. I do have limited statistics that shows more regarding the degradation of square foot values so please give me a call so I can provide more accurate facts regarding the specific area on Anna Maria Island that you are researching.
Anna Maria Island Real Estate for Sale Inventory
Inventory continues to drop and is actually at its lowest since 2005. Of course as supply drops and demand increases our prices will continue to level out and we are seeing a similar affect for single family homes. If you are in the market for an investment property give me a call. Banks are beginning to loosen up their lending and several are supplying real estate money for 30% down and in a few months that will free up more to a standard 20% down.
* By no way are rental proceeds guaranteed and should not be considered to be guaranteed.
We continue to see signs of the housing turn around. It appears as though the first time home buyers credit of up to $8000 is beginning to take hold. Construction starts in United States for the month of June jumped 11% as compared to the month of May. The last four out of six months, housing starts have been up. It doesn’t hurt that home builders are in a rush to finish homes by November for their buyers to take advantage of the first time home buyer tax credit.
Our little Anna Maria island there are not many folks taking advantage of the first time home buyers incentive. Most feel as though Real Estate resort areas LEAD the market. I would hope everyone agrees that Anna Maria Island is a resort area. So, if the rest of the United States Market is moving out of the housing slump then it is investors are too late for Anna Maria Island’s low. I believe our little Anna Maria Island is a resort area and is a LEADING indicator for home sales information.
Absorption rates of real estate is a very important indicator. Nationwide our absorption rate moved down from 10.2 months of real estate inventory for sale to 8.8 months. (Source CNBC) Investors are entering the market due to low interest rates and fantastic real estate buys.
Below you will find Quarter 2, 2009 Anna Maria Island Real Estate inventory absorption chart. This shows the past number of years of inventory we have had on Anna Maria Island. The most important aspect of the chart below is the blue line which shows the amount of inventory on the island by quarter. It is an absorption figure which shows number of months of Anna Maria Island property for sale. It is a simple calculation. If there are 500 properties for sale and for the past quarter we averaged 50 properties sold per month then our inventory absorption is 10 months or there is an equivalent of 10 months of inventory on hand. The most important part of the chart below is our absorption level relative to previous periods of time.
This chart is property of Island Real Estate of Anna Maria Island and Alan Galletto and should not be duplicated.
WASHINGTON – Construction of new U.S. homes rose in June to the highest level in seven months as builders rushed to pour foundations for homes that must be completed by the end of November for first-time buyers to take advantage of a special tax break.
The Commerce Department said Friday that construction of new homes and apartments jumped 3.6 percent last month to a seasonally adjusted annual rate of 582,000 units, from an upwardly revised rate of 562,000 in May.
It was better than the 530,000-unit pace economists expected, and was the second straight monthly increase after April’s record low of 479,000 units.
It’s still a great time to buy on Anna Maria Island although inventory has dropped again and our inventory has moved down slightly on the island. In addition, the amount of inventory has dipped to below 30 months.]
A few things point to the bottom has come and gone for Anna Maria Island Real Estate. Firstly, in the month of April, Island Real Estate of Anna Maria Island sales professionals averaged more than one contract every other day. The sales activity was similar to the highest activity months in 2004 and 2005. I suspect in the next few months we will see a continued drop in inventory and more importantly a substantial drop in the amount of months of inventory on hand. As supply continues to drop, prices will increase.
In addition, interest rates last week inched above 5.0% with several economists claiming our economic low has come and gone and we would see an improvement in the economy later this year.
Anna Maria Island Real Estate Inventory
Act now, there are still a few real estate deals in Bradenton Beach, Holmes Beach and Anna Maria City. Don’t say I didn’t warn you!
Learn more about Larry Chatt - Broker Island Real Estate of Anna Maria Island, Inc.
Office Phone (941) 778-6066
Cell Phone (941) 224-4072
Alt. Phone (941) 345-1288
Fax (941) 778-6306
Email - Larry Chatt
6101 Marina Drive, Holmes Beach, FL 34217
