2019 Market Outlook. Jeff Tumbarello Director SWFL REIA Broker/Owner Steelbridge Realty LLC

Transcription

1 2019 Market Outlook Jeff Tumbarello Director SWFL REIA Broker/Owner Steelbridge Realty LLC

2 Data from MLS (exported 1/14/2019 9:26 AM) and public records. Trended with Microsoft excel. Unless otherwise stated, charts contain all Residential assets.

3 What Market Are We in Today? ** Each cycle varies in depth, duration and intensity. No two cycles are ever alike. That is true 50 percent of 100 percent of the time. Market conditions could be different for various niches, different locations, and different users. Therefore, you first need to identify exactly what you mean by the market. The Commercial market? Retail. Office. Industrial. The Residential housing market? Resale. New Construction. The Rental market? SFR. Multifamily.

4 Dow Jones Industrial Average (^DJI) for December 2018

5 Lets talk about the December 2018 Stock Market. In my opinion the stock market correcting was three things: Wall Street traders are/were reallocating for a cyclical bear market. They did this because of Fed Bank rate hikes. When the prime lending rate breaks 5.5%, we generally have a recession in 9 to 18 months. Our leverage structure as a result of the aftermath of 2008 is different than previous cycles. High Frequency trading gone wild as a result. The Plunge Protection Team Gone wild as a result.

6 Year over year metrics 2017 versus DIFF Sales Volume $5,584,071,334 $6,164,000, % Sales Counts 19,453 20, % Average Price $287,055 $298, % Median Price $219,998 $227, %

7 Year over year metrics December 2017 versus December DIFF Volume $449,669,822 $415,682, % Counts 1,650 1, % Average $272,527 $311, % Median $218,000 $230, %

8 Sales by Year Built 2017 Versus

9 Sales by Year Built Dec 2017 Versus Dec

10 Sales Count Patterns ,500 2,000 1,500 1, Jan Feb March April May June July August Sept Oct Nov Dec

11 Bubbles of activity 500K and below Bubbles of Sales Activity Lee County Resi 2018 Lee Cnty 2017 Lee Cnty

12 Bubbles of activity 500K and below. December Only Bubbles of Sales Activity Lee County Resi 2018 Lee Cnty Dec 2017 Lee Cnty Dec

13 By City % Difference YOY % Difference YOY Sales Volume By City Sales Counts Average Price St. James City 19.76% 19.35% 0.34% Sanibel 23.66% 15.09% 7.44% Punta Gorda 18.51% 14.29% 3.70% North Fort Myers 10.61% 9.74% 0.79% Miromar Lakes 20.27% 22.54% -1.85% Lehigh Acres 9.81% 0.47% 9.29% Fort Myers Beach 3.98% 7.53% -3.30% Fort Myers 11.33% 7.05% 3.99% Estero 14.89% 12.25% 2.35% Captiva 8.01% % 25.75% Cape Coral 7.28% 3.71% 3.44% Bonita Springs 4.40% 5.52% -1.06% Bokeelia 1.84% -0.89% 2.76% Alva 37.11% 28.03% 7.09%

14 December VS December % Difference YOY % Difference YOY By City Volume Counts Average Price St. James City -0.51% 0.00% -0.51% Sanibel % % 13.29% Punta Gorda -4.08% 11.11% % North Fort Myers % % 16.68% Miromar Lakes % 40.00% % Lehigh Acres % % 3.37% Fort Myers Beach 21.64% 23.53% -1.53% Fort Myers % % 3.67% Estero 15.48% % 30.54% Captiva % % 38.79% Cape Coral % % 4.70% Bonita Springs 49.96% 5.98% 41.49% Bokeelia 45.72% 10.00% 32.47% Alva 70.63% 20.00% 42.19%

15 What else is going on?

16 Pricing Since 2001 $400,000 Lee Avg Price $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

17 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Since 2009 $350,000 Lee Avg Price Since 2009 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0

18 Since 2015 $340,000 Lee Average Price Since 2015 $320,000 $300,000 $280,000 $260,000 $240,000 $220,000 $200,000

19 Sales Counts by Property Type DIFF Single Family 12,519 13, % Villa Attached % Low Rise (1-3) 3,466 3, % Mid Rise (4-7) % Townhouse % High Rise (8+) % Manufactured %

20 Pricing by Property Type Average Price 2017 Average Price 2018 Difference Single Family Villa Attached Low Rise (1-3) Mid Rise (4-7) Townhouse High Rise (8+) $319,728 $335, % $207,076 $222, % $206,005 $209, % $266,539 $263, % $187,575 $195, % $512,338 $526, % Manufactured $106,816 $110, %

21 Cash Sales Percentage DIFF Number of cash sales 7,988 8, % Cash % 41.06% 40.22% -2.04%

22 Distressed Sales Percentage DIFF REO % REO % 3.24% 2.20% % SS % SS % 0.51% 0.38% % Distressed 3.75% 2.58% %

23 Waterfront/Gulf Access Sales Percentage DIFF Gulf Access Sales Counts Gulf Access % of sales counts Waterfront Sales Counts Waterfront % of sales counts % 14.21% 13.55% -4.67% % 34.03% 34.04% 0.01%

24 Supply and Demand As of PM we have 6.11 months Inventory for Lee County Residential Assets listed in the MLS

25 Lee Cnty Avg Price Lee Cnty Sales Counts $400,000 2,500 $350,000 $300,000 2,000 $250,000 1,500 $200,000 $150,000 1,000 $100, $50,000 $0 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 0

26 Inventory by City City Active listings # of Sales in last 12 months 12 month burn rate Number of months inventory Lehigh Acres Cape Coral Fort Myers Alva North Fort Myers Estero Bokeelia Matlacha St. James City

27 Inventory by City City active # annual sales Monthly absorb Months Inventory Bonita Springs Punta Gorda Fort Myers Beach Miromar Lakes Sanibel Matlacha Isles Captiva Useppa Island

28 Inventory by Zip Code Postal Code Active listings annual sales counts monthly absorption Months of inventory

29 Inventory by Zip Code Postal Code Active listings annual sales counts monthly absorption Months of inventory

30 Inventory by Zip Code Postal Code Active listings annual sales counts monthly absorption Months of inventory

31 Inventory by Zip Code Postal Code Active listings annual sales counts monthly absorption Months of inventory

32 Distressed Market Update The negative price pressure from the last cycle was driven by distressed sales.

33 Lee County Florida

34 Mortgage Related Lis Pendens Mortgage Related Lis Pendens 30,000 25,000 20,000 15,000 10,000 5,

35 In Closing.

36 A word of caution about listening to Real Estate Agents speak of their production. Most agents can not see past their own financial status. There are a lot of agents right now. These are only Residential sales in the MLS. 7,088 Agents had at least a closing in Lee County for ,932 Agents had at least 2 closings in Lee County for ,143 Agents had at least 10 closings in Lee County for Agents had at least 20 closings in Lee County for 2018.

37 2,500 Trend to Watch 2018 was pretty awesome across the mean. 3 months had more than 2,000 sales! That may be hard to beat. Sales Counts ,000 1,500 1, Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

38 New Construction outside of MLS or do we lack inventory? There are 153 homes with a year built 2017 and newer, that are active as of 1/16/ have sold in the last 365 days. That is 2.17 months inventory.

39 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov SFR Permits Cape Coral

40 Outlook for Retiree Market 62 Year olds 70 Year Olds 66 Year Olds 4,400,000 4,200,000 4,000,000 3,800,000 3,600,000 3,400,000 3,200,000 3,000,

41 Should the market correct. Most corrections are fueled and amplified by unsustainable debt.

42 Commercial Debt levels

43 Residential Debt Levels

44 Closing Thoughts was a great year from a statistical perspective. It may be tough just by the sheer numbers to beat that year. In 2016, all of the economic talking heads were calling for a recession 2 years out. In 2018 they were saying the same thing. At some point, it has to happen. We 2 different economic trends happening in real estate. The Baby Boomer generation retirement. The Millenial/Gen Z coming of age. Each will have different and specific impacts on the market. This market does not share the same modalities of the 2006 crash. If and when a correction happens, it will be different in intensity and duration. Using the last correction as a playbook can be problematic. December 2018 was pretty awful from a statistical point of view, January 2019 appears to be on the same path from a year over year perspective, Is this a trend or just the economy playing wait and see with the Macro pictures trials and tribulations?

45 Questions?