Rick Faby spent 35 years in the investment brokerage business before co-founding Team Faby Luxury Realtors.
December Musings by Rick
Have you seen the movie, The Endless Summer? It’s my favorite movie and is about surfing, but really it’s about harnessing the feeling that exists in this most special time of year.
“Summertime is Daddytime” –that’s what my children used to say because I always took the time away from work to go to the beach and be with them during their school breaks. Thus, my daughter’s name is Summer! Summer is a time to relax, reflect, read, connect, travel, plan and grow. We all need this time to enjoy and live life to the fullest. It always works out that connecting with family and friends is profoundand more chill. Sleep tends to be deeper when a day in the sun and the smell of salt air enters my lungs. That wonderful feeling of being tired from spending the entire day out of doors. I love this time of year.
I’ve noticed that so many in our northern sectorsay things like, “only 142 days till summer is here, I’m so sad that summer is over, It’s Labor Day, I can’t wait until Memorial Day.” People are desperate for summer. A few years back, Iwoke up one day and my wife and I talked about and decided to move to Naples, FL full-time, as we were also searching for that summertime feeling. We now have “endless summer”, do not dread the cold weather and do not waste valuable time longing for summer to return. Try it, you’ll like it. “He likes it, Hey Mikey”-Life cereal commercial circa 1970. I’m showing my age, here.
What are the benefits of year-round summer?Life is happier, more chill, relaxed, and active. We live outside all day, every day and actually have very little rain from November 1- April 15. Endless summer does exist. You just need to know where to find it.
Market Commentary – December 2022
Florida Real Estate
We are currently in a post-hurricane environment, providing sellers and buyers with additional considerations. Many owners affected are rebuilding and are renting or buying replacements as temporary residences. Buyers are seeing more time to be able to make decisions as there was, for a while, a lull in inventory. It’s become even more important to have competent real estate representation (ahem, this is where WE come in). Inventory numbers are steadily picking back up as clean-up has been (mostly) completed in Naples and our beach access points are reopened. Downtown businesses were surprisingly spared and have been operational for months.
Properties are still selling quickly, in some cases before they are even listed on MLS. The last three properties we have sold went under contract before they even listed on MLS and at over-asking price. The contributors to the quick sales are: repositioned homeowners due to the storm, Canadian and European citizens now travelling now that COVID restrictions have been lifted, continued Northern residents’ desire to escape cold winters from the north, and the cost of rent being so escalated that it is more affordable to buy. Now is a good time to purchase before “Season” starts and the crowds arrive.
There is a high demand for rental properties. These properties still have an above-average cash flow and there is a nice inventory of renters willing to move in. As my Dad always said, OPM-other people’s money-is a solid way to pay down debt. This is a proven long term way of building wealth. Beware, though, condo fees and hoa assessments can derail your plans and sites like Zillow and Realtor.com do not delineate these fees. We are more than happy to send you complete listings with fees attached. Just ask.
Economic News
Interest Rates
Mortgage Interest rates have ticked up this year from a low of 1.78% to the high 6’s. Although a major increase, it is nowhere near the all-time high which was 18% in the early 80’s. At 6%, homes are still affordable and still cheaper that rent. Inflationary pressures are causing these FED increases and it seems that we may be close to a peak, with rates trending down in the 2nd quarter of next year. The good news is that those with savings are now earning close to 4% on their “safe” allocation in their portfolio. This represents a nice raise. Also, beginning in December, the 8+% rise in social security benefits is a nice increase in income.
Markets and Economics
The S &P 500 has been declining as we enter a recessionary climate. Remember, the market anticipates events six months in advance – a leading indicator. The inflationary pressures of food, oil, car prices, staples, building material and housing have contributed to expectations of lower profits. An increase of governmental spending/taxation are driving inflation and these are not contributors to a robust stock market.Stagflation, to coin a term from the 70s, is slow growth with inflation. This is what we are experiencing. Expect further declines in the markets and increase allocations to safe, medium-term interest bearing vehicles.
Bitcoin — crypto – I have been negative on this unregulated vehicle since the mid-$55,000 range. It is still very overpriced and has cost a lot of “investors” a great deal of monetary losses. As Peter Lynch stated, “Never buy something you don’t understand and you can’t touch, see and feel.” Avoid this investment at all costs. This brings us back to owning Timberlandat 4% growth of a tree per year guaranteed. The price of lumber changes year to year, but it has pulled back and now may be a good time to purchase. The risks are bugs, disease and fire.
THINKING ABOUT SUMMERTIME FOOD
Ahhh the taste of crabs, fresh Silver Queen sweet corn, New England lobster, beefsteak tomatoes right off of the vine, Bennett Orchards peaches, Homemade Vanderwende Farms ice cream, fresh Salsa from the Bethany Farmer’s market, Rockfish stuffed with lump crab, and lastly, since September arrived (an R month), fresh, cold oysters. These are the tastes of summer.
SUMMERTIME INTO FALL TRAVEL
We visited a few places on our bucket list and returned to some favorites so far this year. Adventure, exploration and fun.
St. John – A USVI, easy to get to and no COVID restrictions. There are very nice places to stay, beautiful beaches (Hawksnest and Honeymoon), Food was better than expected and the treat of the trip was a visit to CaneelBay’s reopening of Zozo’s (a perfect 10)!Great Bars -The Beach Bar is my favorite, nice people, zero crime and a perfect place for some R and R.
Cork, Ireland– We visited our Irish cousins who just added a baby boy to the family. The people in Ireland are so nice and the friendliest in the entire world. Ahhhh to enjoy a pint of real Guinness – there is no better taste. Seafood is wonderful and don’t forget to devour a delicious shepherd’s pie. A wonderful place to stay is The Imperial Hotel -just perfect. Comfort, great location and exquisite service.
Rome and Florence Italy– We stopped in Rome for a couple of days on the way to visit our daughter, Emily, who lives in Florence. Rome is one of the easiest cities to navigate with public transportation. We visited our Christie’s International Real Estate office and established a nice relationship with the Christie’s Italy Broker, Max. So many Italians are finding their way to Naples, Florida. We are source for all things Naples! Dinner at La Prosciutteria in Rome is a must. The absolute finest charcuterie in the world. Also, my favorite Italian pasta meal is at Dilla. A must visit. A wonderful and convenient hotel that is very reasonable in Rome is Trilussa Palace – try it you’ll love it.
After a quick train to Florence, we explored the city. Take in a sunset view from the top of the city, visit galleries – Uffizi, Pitti Palace, Leonardo Di Vinci, Medici, walk over the Ponte Vecchio and buy some gold jewelry, stop in any church to say a prayer and observe gorgeousarchitecture and art, and just walk and have fun.Our favorite restaurants in the neighborhood of Santo Spirito are De Sabitino’s (a small family-owned restaurant where dinner for five with wine, dessert and aperitivo was $72 including tip) and I’Raddi, where you will get the absolute best Florentinian steak EVER. Enjoy the people, the culture, the wine and food and all things Firenze. A convenient place to stay across the bridge is Hotel Adriatico. It has been used by diplomats worldwide and is beautiful and very reasonably priced.
BOOKS
A Place in the World Finding the Meaning of Home – Frances Mayes
Sullivan’s Island – Dorothea Benton Frank
1,000 Places to see before you die – Patricia Schultz
The Great Alone – Kristin Hannah
Dreamland – Nicolas Sparks
A Trip to the Beach: Living on Island Time in The Caribbean – Melinda Blanchard
The Hungry Ocean – A Swordboat Captain’s Journey – Linda Greenlaw
Merry Christmas and Happy New Year. Make those goal and to-do lists for 2023! Rick