The Most Important Pieces of Housing Data

Several economists, financial pundits, bankers, and real estate experts have predicted for the past several years - using high tech and complex formulas - that the housing market shall continue to recover this year and for the next several years. While the news is generally optimistic from most of the pundits, there are two simple and easy-to-understand visualizations you can use to predict the return of the housing market yourself.

The first important graph to evaluate when it comes to predicting the return of the housing market, is the graph below. While the information on the graph is consistent (i.e. boring) it highlights a very key element of housing demand.

The net population growth - via birth rate and an influx of immigrants - of the United States has increased every year at approximately 3.0% for the past 30 plus years. The Census Bureau predicts this same growth rate, if not slightly higher in some years, for the next 20 plus years. What does this mean for the housing market? It means that demand for housing will continue to rise because new generations of the population will need a place to live.

The next important piece of data when it comes to predicting a housing market recovery is in the image below. When comparing the two images, the picture on the left is a map of the United States from 1960 and the image on the right is a map of the United States from 2015.

What are the differences between the two images? Trick question, there are no differences. The maps are the exact same. The United States has not produced any new land in the last 50 years. What does this mean for the housing market? It means that land is a limited resource, and an increase demand for the same supply is good news for those who own or invest in real estate.

Demand for housing will always be there. Only a few major shifts in the current way of life will ever reduce the demand for housing. Those major shifts would be if homeless living ever becomes the norm; if new land mass was added to the United States - which is not impossible, but improbable; and if the population of the United States was ever to shrink - which all indicators point to the population growing at a consistent rate for the foreseeable future.

While demand for housing will always be present, the level and amount of demand has always been in flux depending on the year or decade. For example, in 2000 the housing market was at an equilibrium point with supply and demand remaining at steady levels. In 2005, housing demand far exceeded housing supply and new and existing homes were practically flying off the shelves. In 2011, most sellers had difficultly giving away their homes.

With the last several years of the housing market recovery, buyers have slowly and tentatively re-entered the housing market - if they have re-entered the housing market at all. Think of water building up behind a dam. Water will eventually make its way through the dam, either by force or in a controlled manner. In 2005, one could think of homebuyers flooding the housing market by force. While this provides a short-term gain for all those involved in the real estate industry, it is not sustainable. Instead, we should focus on release the flood waters (i.e. homebuyers) in a controlled and sustainable manner.

To better illustrate this point of pent-up demand, take a look at the chart below from Dr. Lawrence Yun, chief economist from the National Association of Realtors.


In this chart, Dr. Yun highlights the key points in pent-up demand. If we think of the year 2000 as an equilibrium year for housing (and we can because in the year 2000 no one was talking about hosing, nothing good and nothing bad happened in housing therefore it was uneventful and used a constant for future comparisons) we can see that while the population of the United States grew in the past decade and a half, home sales declined in the last decade and a half. This pent-up demand will be the driving force for the housing market recovery.

So the next time you hear of financial advisers, real estate experts, and business pundits talk about the pros and cons of the housing market recovery, just remember these two simple charts and images and rest assured that the housing market will return.

Tampa Housing Superlatives

Every year, the Tampa housing market produces some unique homes, mansions, and estates that have features that range from the superfluous to the outlandish. To give you a better idea of some of the more interesting properties that sold last year in the greater Tampa Bay area, below is a list of some of best residential real estate superlatives. In no particular order, here they are.

(Each superlative will have the address of the sold property as well as the final sales price.)

Most Bathrooms

#5. 8 full, 0 half

16209 Villarreal de Avila, Tampa -  $2,700,000

#4. 9 full, 1 half

712 N. Casey Rd., Osprey - $8,000,000

#3. 9 full, 2 half

3 Mountain Lake, Lake Wales - $544,000

#2. 10 full, 1 half

2850 Union St., Clearwater - $3,128,500

#1. 10 full, 3 half

706 Guisando de Avila, Tampa - $5,580,000

706 Guisando de Avila

Most Bedrooms

#5. 8

20880 Morgan Rd., Land O' Lakes - $700,000

#4. 8

10304 Carroll Shores Pl., Tampa - $1,220,000

#3. 8

712 N. Casey Rd., Osprey - $8,000,000

#2. 9

9806 Detrop St., Riverview - $455,000

#1. 10

706 Guisando de Avila, Tampa - $5,580,000

9806 Detrop St.

Largest Homes

#5. 11,495 sq. ft.

125 18th St., Belleair Beach - $6,700,000

#4. 12,908 sq. ft.

2505 Casey Key Rd., Nokomis - $6,500,000

#3. 13,553 sq. ft.

712 N. Casey Rd., Osprey - $8,000,000

#2. 13,816 sq. ft.

2850 Union St., Clearwater - $3,128,500

#1. 28,893 sq. ft.

706 Guisando de Avila, Tampa - $5,580,000

Largest Condos

#5. 5,200 sq. ft.

1700 Gulf Blvd. #4S, North Redington Beach - $1,650,000

#4. 5,231 sq. ft.

1700 Gulf Blvd. #6N, North Redington Beach - $1,705,000

#3. 5,370 sq. ft.

18270 Sunset Blvd. #A, Redington Shores - $2,000,000

#2. 5,400 sq. ft.

19520 Gulf Blvd. #502, Indian Shores - $2,550,000

#1. 5,585 sq. ft.

464 Golden Gate Pt., Penthouse 9B, Sarasota - $4,250,000

19520 Gulf Blvd.

Longest Time on the Market

#5. 7 years, 6 months, 8 days

10365 Paradise Ct. #36, Treasure Island - $97,000

#t4. 7 years, 7 months, 17 days

712 N. Casey Rd., Osprey - $8,000,000

#t4. 7 years, 7 months, 17 days

799 E. Gulf Blvd., Indian Rocks Beach - $675,000

#2. 7 years, 8 months, 11 days

1695 Pinellas Ave. S., Unit E2, Tierra Verde - $415,000

#1. 2,904 days - 7 years, 11 months, 19 days

6718 70th Ave. N., Pinellas Park - $178,000

799 E. Gulf Blvd.

Most Outdoor Space

#5. 3,664 sq. ft.

3206 Mermaid Ct., New Port Richey - $641,500

#4. 4,079 sq. ft.

6016 Kipps Colony Dr., Gulfport - $570,000

#3. 4,210 sq. ft.

360 El Greco Dr., Osprey - $885,000

#2. 4,212 sq. ft.

160 Sanctuary Dr., Crystal Beach - $735,000

#1. 4,370 sq. ft.

3461 Bayou Sound, Longboat Key - $1,785,000

Most Expensive Homes

#5. $7,070,000

3466 Gulfmead Dr., Sarasota

#4. $8,000,000

712 N. Casey Key, Osprey

#3. $8,850,000

8250 Sanderling Rd., Sarasota

#2. $10,250,000

4300 Higel Ave., Sarasota

#1. $11,850,000

7712 Sanderling Rd., Sarasota

Most Expensive Condos

#5. $3,800,000

2052 Benjamin Franklin Dr. #901, Sarasota

#4. $3,900,000

2052 Benjamin Franklin Dr. #1001, Sarasota

#3. $3,965,000

1300 Benjamin Franklin Dr. #801, Sarasota

#2. $4,200,000

4125 Gulf of Mexico Dr., #301, Longboat Key

#1. $4,250,000

464 Golden Gate Pt, Penthouse 9B, Sarasota

Largest Piece of Property Sold

#5. 56.00 acres

6035 Wuchula Rd., Myakka City - $715,000

#4. 105.35 acres

14820 Country Rd. 675, Parrish - $625,000

#3. 125.87 acres

31940 Clay Gully Rd., Myakka City - $1,250,000

#2. 131.02 acres

32301 Singletary Rd., Myakka City - $1,275,000

#1. 160.00 acres

31045 Betts Rd., Myakka City - $950,000

Most Expensive Price per Square Foot Home

#5. $1,345.29/sf

325 Casey Key Rd., Nokomis - $1,199,999

#4. $1,798.25/sf

621 Casey Key Rd., Nokomis - $2,050,000

#3. $2,005.74/sf

165 Whittier Dr., Sarasota - $3,496,000

#2. $2,083.33/sf

203 Sprice Ave., Anna Maria - $1,450,000

#1. $2,513.26/sf

7712 Sanderling Rd., Sarasota - $11,850,000

7712 Sanderling Rd.

Most Expensive Property Taxes

#5. $72,040

2505 Casey Key Rd., Nokomis - $6,500,000

#4. $72,270

2735 Gulf of Mexico Dr., Longboat Key - $5,750,000

#3. $89,660

2016 Casey Key Rd., Nokomis - $6,200,000

#2. $97,153

125 18th St., Belleair Beach - $6,700,000

#1. $125,791

712 N. Casey Key Dr., Osprey - $8,000,000

Most Expensive Cash-Only Transaction

#5. $4,250,000

464 Golden Gate Pt., Penthouse 9B, Sarasota

#4. $5,750,000

2735 Gulf of Mexico Dr., Longboat Key

#3. $6,200,000

2016 Casey Key Rd., Nokomis

#2. $6,500,000

2505 Casey Key Rd., Nokomis

#1. $8,000,000

712 N. Casey Key Rd., Osprey

Oldest Home Sold

#5. 1897

1711 W. Jetton Ave., Tampa - $579,000

#4. 1896

6835 Shamrock Rd., Tampa - $289,000

#3. 1890

2001 E. 2nd Ave. #14, Ybor City - $206,000

#2. 1885

115 S. Spring Blvd, Tarpon Springs - $740,000

#1. 1873

1015 S. Oak Ave., Bartow - $70,900

115 S. Spring Blvd.

All of the data was based on all completed, residential transactions from January 1, 2014 until December 15, 2014 in the counties of Hillsborough, Pinellas, Pasco, Polk, Manatee, and Sarasota from the Mid-Florida Regional Multiple Listing Services. Pictures are credited to individual listing agents and MFRMLS.

The New Household

The results of the American Community Survey by the United States Census Bureau for 2013 were recently released, and the results showcase a shift in the way we think of who lives in the average American house.

At the end of 2013, there were 116,391,033 total household units, a 0.3% increase from 2012. This number includes any and all registered single-family homes, apartments units, condominium units, townhouses, mobile homes, and any virtually every permanent dwelling place.

Looking at the pie chart below, we can see the breakdown of the number of units in the three household types: family, one-person, 2+ non-family.

Within the Family Households, we can extrapolate the data from the ACS that 88.2% of these units have the "traditional" family structure with a head of household, a spouse, and one or more children. Nearly seven million households, or approximately 8.9% of the family household units, have extended family living with them. 2.9% of these units have non-family members living with them as well.

Market Impact: The traditional family structure is still the most dominant type of household unit in the country. What is important to note that the definition of traditional family unit is expanding to include possible extended family and family friends.

One-Person Households
From the One-Person Households, nearly 30% of household types across the country, we see that this number has increased 2.6% since 2010. What this tells us that more and more people are choosing to live on their own, having either put off getting married and starting a family or have either ended their first family and are now living independently.

Market Impact: This can have a negative impact on the housing market as single people tend to have less buying power than their married counterparts, meaning they either cannot afford a home or can only afford smaller, less expensive homes.

2+ Non-Family Households
Taking a look at the pie chart below, we can see the breakdown of the population in the final type of household, those not living by themselves or in the traditional family type.

In general, this type of household population has increased 3.2% since last year alone, the largest population increase of any group. What this shows us is that over 18 million Americans are living with someone other than a traditional family relative.

Market Impact: In the opposite sense of a growing number of individual person household, a growing number of multi-person household typically has more buying power. Although it may be more difficult to document and track this buying power than that of a married family, two or more buyers can change the market more so than an individual. While this group still remains the smallest group by a wide margin, it is a growing market that should be observed for the next several years.

What this means
While the traditional family structure of a household is still the dominant and most common type of household in the United States, the other two types of households are picking up the pace as an alternative way of living. Focusing efforts to serve these growing markets can be a wise way to increase business opportunities, but one should not dismiss the "traditional" family unit as this still widely dominates the housing landscape.

A Real Estate Improvement Company

The real estate industry has many unique facets and players. But no matter what role you play or how what you do in the real estate market, there is one important goal that everyone should keep in mind.

When you consider real estate, you should consider it as an investment. And when you think of the criteria involved in making a good real estate investment, you must examine and analyze the utility and the value of such an investment.

Another way to look at utility is to look at usage. Is a particular property being used to its highest and best usage in accordance with all local laws and statues? In other words, can I put four different townhouses on this large residential lot on a busy street and receive more income in rent than I would be able to charge if I only had a single-family home on this property?

When we talk about value, we think of cost and we think of price. Can you sell a particular property for a price more than the purchase cost? If so, your property has positive value. If not, you property has decreased in value.

The goal of a real estate improvement company is to maximize both the utility and value of a property. We can do this through investing, managing, developing, and marketing a particular property.

To take our previously stated example of the townhouses, we will take a look at the utility and the value. With regards to utility, we have certainly increased - or improved - its utility. We now house four different families, versus just one previously. When looking at the value, we have increased the net operating income of a property thereby increase its value.

But just how much did we increase the utility and the value? This is where a real estate improvement company will come in hand to determine just how much utility and value this project provided versus other similar (or different) projects.

When looking at a piece of property, think about what the best usage of that property could be. Then, think about if that type of project is feasible on that property. If you have mastered those concepts and kept those goals, you have yourself a real estate improvement company.

Jobs in Technology, Energy Pave the Way for Housing in Florid

The Milken Institute recently released their findings on the Best Performing Large Cities in the United States.  Although the state of Florida did not have a particularly strong showing, the Tampa/St. Petersburg metropolitan area ranked second overall in the state of Florida.

Courtesy of the Milken Institute

To view the full report, click here.

The Milken Institute is a nonprofit, nonpartisan economic think tank whose mission is to improve lives around the world by advancing innovative economic and policy solutions that create jobs, widen access to capital, and enhance health.  What professionals in the real estate and construction industries should pay particular attention to in the M.I.’s mission statement is its particular focus on helping to create jobs and gain access to capital – the two most critical pieces of advancing the housing industry.

Overall, the state of Florida did not compare well to other states throughout the country like Texas, Colorado and California.  These states are leading the charge in the energy and technology sectors.  These sectors are especially important for both job creation and access to capital.  As previously mentioned, job growth and access to capital are the two most important pieces to improve the housing market.

Not to be outdone, Tampa did rank in the Top 40 in the country for number of high tech industries last year, as well as the Top 75 in the country for concentration of high technology jobs.  Again, the concentration of jobs in the technology industries is especially important because they provide an increase in job creation as well as further access to capital.  With both of these two criterias filled, the housing market in the Tampa area will continue to show signs of improvement.