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Tag: Anna Maria Island real estate

Castles in the Sand

Home ownership and the millennials

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

It pains me to say this, and I hope it’s not true, but there are signs that the face of home ownership is starting to change. Housing was always the driver of the economy, both purchasing homes and the purchases that were associated with homeownership, but home ownership may be taking a time out.

More than 10 years after the financial crisis hit the housing market, it has not recovered on a national level to the same degree as the economy in general. According to the Census Bureau, last year there were a combined 5.4 million new and existing homes sold. This is about the same as in 1998, where we had 50 million fewer people living in the country. I don’t know why we’re surprised to learn that we still have a hangover from the financial crisis since housing was the primary reason for the financial crisis and the careless lending practices of government-backed Fannie Mae and Freddie Mac.

Now there is another little wrinkle in why the housing market has not picked up – millennials.

Millennials, those born from 1981 to 1995, were supposed to be the hope of the housing market when they reached the age when people usually purchase homes, only it’s not happening. The homeownership rate among households headed by someone under 35 was 35.4 percent as of the first quarter of this year. The Census Bureau goes on to say that, by comparison in 1999, the homeownership rate for this age group was about 40 percent.

The speculation is that the financial crisis hit this generation hard. The unemployment rate was high and it took millennials longer to get a foothold in the workforce, build careers and deal with college debt, leaving purchasing a home at the bottom of their list.

In addition, there has been a renewed preference for city living, which is where the higher paying jobs are and lower homeownership rates. And finally, this generation witnessed something that no one thought would ever happen – owning a home did not guarantee a good investment, complicated with a loss of incentive based on the 2017 tax cuts.

After all that good news, let’s see what’s happened in April in Manatee County based on the reporting of the Realtor Association of Sarasota and Manatee:

Sale of single-family properties did well in April compared to last April. The number of closed sales were up 3.9 percent. The median sale price was up 1.6 percent to $315,000, however, the average sale price was down 3.5 percent to $390,612. The median time to contract was 48 days and the median time to the sale of the property or closing was 92 days. The month’s supply of available properties was 4 months down 7 percent.

As far as condos, Manatee County closed 0.7 percent fewer this April compared to last year. The median sale price was also down 4.1 percent to $196,500 and the average sale price was down 7.8 percent to $236,127. The median time to contract was 43 days and the median time to the sale of the property or closing was 88 days. The month’s supply of properties was 4.7 months, down 4.1 percent.

Overall, the single-family properties are holding well over $300,000, an important a benchmark, and although condo sales are down in value, they’re not down substantially in numbers closed. The really interesting numbers are the amount of available properties going down for both single-family and condos. Four months of availability is low. It’s good news for sellers, not so good for buyers and not really good for a vibrant market.

Are we entering a new era? If we are, new isn’t always bad, it may just a realignment of our priorities and expectations. Real estate markets are dynamic and that’s a good thing. Maybe we were standing still for too long.

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Falling in love with a second home

One of our favorite topics

Castles in the Sand

Falling in love with a second home

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

Last week we had a conversation about financing second homes and some updated government regulations about renting. We even touched on the pending Florida legislation regarding short-term vacation rentals, but this week we’re going to talk about the practicality and affordability of second homes and falling in love.

Vacation homes are the ultimate discretionary purchase just above recreational boats. The one thing both of these big-ticket items have in common is the emotional aspect that manifests itself by the warm tingle that overwhelms you when you set eyes on the object of your affection. But be careful, it’s dangerous to fall in love so quickly and requires a great deal of vetting.

A vacation home should make you feel like you’re on vacation when you walk in the front door. You don’t want to step in and notice the peeling paint, mold or the ancient appliances. You also don’t want something too big or high maintenance that it infringes on what should be a relaxing time. Technology will make some of this easier to manage as well as making your property more secure when you’re not there. You can control the heating and cooling, unlock the doors should a contractor need to get in and set up cameras to see if something looks not quite right.

That said, if you’re finding your vacation home overwhelming then your future buyer will feel the same way. Vacation homes live by an entirely different set of criteria than your full-time home. The location should be the prime motivator in making a second home decision and worry more about views, beach access and walkability than the quality of schools. According to the National Association of Realtors, the most popular vacation home locations are resort areas and beach locations which account for 66 percent of the market.

If you’re considering purchasing a vacation home with a partner or partners here are a few points to consider. What is each partner’s usage schedule? Unless you are really cozy with your partners, you need to carve out some private time for you and your family. Also, are friends or family of one the partners always welcome even if the owner is not with them? Should the property be rented part of the year to cover expenses and how will the maintenance costs be managed? And who gets the final say on picking upgrades like paint color, furniture or air conditioner and appliance replacement?

And the biggest consideration is what if one of the partners wants out for personal or financial reasons? An escape hatch needs to be developed and agreed on by all partners before purchasing. Some of the things to address are the timeframe, the minimum number of years to own and a buyout arrangement or selling the property.

Finally, many Florida second homeowners decide to convert their second home to their full-time residence for tax purposes. This option is becoming more and more popular as taxes in northern states continue to go up. Keep in mind that the state of Florida has a very advanced way of keeping track of how long Florida residents spend in another home they own, so keep good records since the burden of proof will be on you.

Pretty soon we may all need vacation homes to relax since I recently read that 6,000 new homes will be built on the north side of Manatee County. Our quiet little corner of the world is no more, but at least we all fell in love at the right time.

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One of our favorite topics

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Castles in the Sand

One of our favorite topics

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

It doesn’t take long for a get together with friends and neighbors to morph into a conversation about real estate. One of the preferred topics among the dozens of available real estate topics is second homes, so here’s something that you can float during your next real estate conversation.

Government-backed mortgages obtained through Fannie Mae and Freddie Mac frequently set higher standards for second home buyers. Second home mortgages are different from investment mortgages, which allow renting and always come with higher mortgage rates. But what if you want to rent out your second home but not classify it as an investment property?

Second Home Riders, which have been in force since 2001, are generally attached to the financing of a second home. The rider has always been interpreted by lenders as prohibiting second home owners with Fannie Mae and Freddie Mac backed mortgages from renting the property. This has recently been clarified making the rental of a second home more broadly accepted by lenders. The new wording for the rider allows homeowners to rent a second home after one year of ownership and it allows short-term renting in the first year.

The language was amended at the request of lenders looking for a clarification related to Airbnb rentals and other short-term rental services. Of course, short-term rentals still must meet state and local vacation rental laws. As we know, currently in the Florida legislature there are two vacation rental bills, which as of this writing are going nowhere. If the state Senate and House can agree prior to the end of the legislative session and the bill passes, it would preempt the regulation of short-term vacation rentals to the state and take the rental authority away from local municipalities.

For now, let’s take a look at all sold properties for the month of March reported by the Realtor Association of Sarasota and Manatee:

Single-family homes closed 8.4 percent more this March compared to last year. The median sale price (half above and half below) was $312,000, 9.5 percent higher than last March. You may recall that February’s median sale price took a dip below the $300,000 mark and was $298,500. The average sale price was $392,616, a 6.9 percent increase. The median days to sell were 58 days, an increase of 23.4 percent, and the month’s supply of available properties was 4.2 months, down 8.7 percent.

Condos closed 2.8 percent less this March compared to last March. The median sale price was $203,450, up 1 percent. February’s median sale price was $189,000. The average sale price was $240,995, down 1.9 percent, median days to sell were 74 days minus 14.9 percent, and the month’s supply of properties was 4.8 months, down 5.9 percent.

Overall, we had a great month. Not only are sale prices up, but properties are selling faster. The flip side is the number of available properties, which is down for both single family and condos. It’s never good to have low inventory. I can’t wait to see the April numbers.

It’s quite a different story on a national level. According to the National Association of Realtors, March existing home sales declined by 4.9 percent from February and 5.4 percent from last March. Nationally, the month’s supply of properties is down to 3.9 months.

Next week we’ll have a little more about Anna Maria’s favorite cocktail party conversation. In the meantime, enjoy your first home and your second home if you’re lucky enough to have one and be happy you live in Manatee County, Florida.

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Floods, saltwater and freshwater

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Castles in the Sand

Floods, saltwater and freshwater

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

The poet W. H. Auden said, “Thousands have lived without love, not one without water.” Surely, he meant both freshwater and the ocean water since both feed the body and soul, but both can have their challenges and both are subject to flooding.

Let’s start with the waters that surround our Island. This is the saltwater that feeds our souls. Those of us who choose to live on the Island or near the surrounding waters would never think of living in a landlocked state, it’s just who we are. But we do pay a price for it and that price may be increasing soon.

The Federal Emergency Management Agency (FEMA) has published new Flood Insurance Rate Maps which will change the base flood elevation for many Manatee County property owners. The last time these maps were updated were 30 to 40 years ago and since then there has been much new technology to better analyze data. In addition, the new maps will consider wave action as well as the height of flood waters.

The result of this will be more accurate maps and could result in flood zone ratings going up for some properties, down for others or no change at all. You can determine how your property is affected by checking the Manatee County website, www.manatee.org and keyword search “flood zone.”

The flood zones are assigned a letter and are also color-coded on the maps. Here is a quick review: A (blue), AE (lavender), Floodway (pink), VE (green), X (shaded) and X (no color). A, AE, Floodway and VE are all high-risk for flood and typically require flood insurance. X (shaded) is moderate risk and does not typically require flood insurance and X (no color) is low risk and does not typically require flood insurance.

As most homeowners who have a federally backed mortgage know, you are required to have flood insurance as one of the terms of the mortgage. However, all homeowners in flood zone areas should carry flood insurance. Also, the Manatee County website has lots of good information specific to your property so it’s worth taking a look at for a variety of reasons, including flood zone information.

But what about the other water essential to our lives, freshwater. It may come as a surprise that flooding in the home is the number one risk that everyday consumers make insurance claims on. One in 50 homeowners filed a water damage claim each year between 2013 and 2017.

Part of the reason there are so many more claims compared to previous years is the increase of water-using appliances like wet bars and water filtration systems as well as the popularity of second story laundry rooms. Old pipes in aging homes, worn out valves and worn out hoses contribute to interior floods.

Some of this can be mitigated by inspecting the caulking around tubs and shower stalls, watching for drips under sinks in both the kitchen and bathrooms, and changing hoses to dishwashers, washing machines and ice makers. Condo living is especially vulnerable to leaks from upper units and residents of upper units should be especially vigilant. There is some technology available containing water detecting sensors but at this stage, they are not 100 percent dependable.

Water is life but too much of it can be deadly and inconvenient. So, check the new floods zone maps and check the old hoses, then relax and enjoy the view.

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Castles in the Sand

Taxes come and gone

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

April 15th has finally passed. Every year we hold our breath until this day is in our rearview mirror, especially this year. Let’s see how some of the changes impacted property owners and take a glance at the future.

Mortgage interest and state and local tax deductions have been the most controversial changes in the new tax code. The capping of state and local tax deductions has been a blow to states where these taxes are high and where homeowners own more than one property, driving families to make tough decisions about where to live.

However, of the two, the mortgage interest deduction is the one that could change the face of real estate. The eligible deductible mortgage interest was capped at real estate sales for $750,000 or less, this was reduced from $1 million. But this only tells part of the story; the real change is the doubling of the standard tax deduction to $12,000 for single people and $24,000 for married couples, making the mortgage interest deduction for many homeowners irrelevant.

So far less than half as many American homeowners are claiming the mortgage interest deduction for 2018 taxes than last year. When all tax filings are completed, it is estimated that the number of taxpayers who take the mortgage interest deduction will fall from 20 percent of returns in 2017 to 8 percent of returns in 2018.

For many economists, this is long overdue and could be the first nail in the coffin of the mortgage interest deduction being suspended permanently. The mortgage interest deduction has been in effect since 1913 when the income tax was created, and it was always assumed that the mortgage interest deduction encouraged homeownership, however, study after study does not agree with this. Our close allies, Canada, the United Kingdom and Australia have no mortgage deductions and their homeownership rates are slightly higher than in the United States. Further, this subsidy reduced federal revenues by about $60 billion a year now down to around $30 billion. In addition, the mortgage interest deduction encourages homeowners to purchase larger homes with larger debt, increasing the likelihood of default and many believe has an environmental impact.

And as if New York City doesn’t have enough problems with a soft real estate market and high taxes, now the tax gun is pointed at the ultra-rich. There is already a “mansion tax” in effect in New York of 1 percent of purchased properties valued above $1 million, which doesn’t buy you much in New York City. Now the city wants to impose an additional tax starting at 0.5 percent a year on property valued over $5 million graduating up to 4 percent on property value that exceeds $25 million. How would you like to be a high-end real estate broker in New York if that happens?

As a final note on taxes, now that 2017’s tax returns are hopefully in the file cabinet, it’s probably a good time to have a chat with your accountant relative to payroll deductions. The tax overhaul did decrease weekly withholdings for most people resulting in smaller tax refunds than some people anticipated.

So, congratulations – you made it through a very hairy tax year. Now you can sit on the beach, read trashy novels and make the rounds of island restaurants. You deserve it after surviving the largest tax overhaul in a generation.

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Castles in the Sand

Real estate process speeding up

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

For me, a good recipe has three main components – less than five ingredients, less than 30 minutes and less than two pots. A good real estate transaction is not so different than a good recipe; the objective is to keep it simple.

One of the most tortuous aspects of buying a home has always been the mortgage application process. First, you are asked to provide the lender with W2s, pay stubs, tax returns and possibly your blood type. Then the “loan officer” does a credit check and pulls your credit score. He/she then rolls up their sleeves and adjusts their eye visor and starts plowing through your personal data trying to find why you may not be trustworthy with their money.

The first thing they’re looking for is credit score and if your score is hovering around 600 be prepared to renew your rental lease or pay a larger down payment and/or higher interest rate. Also, your income must support the amount of mortgage you’re applying for and your general credit report must show no serious late payments and hopefully no bankruptcies.

Naturally, while this process is under scrutiny, you will experience some of the most stress you will ever have especially if you’re a first-time buyer. But there is good news which may not take away all of the steps during the process but could speed up the process considerably.

Mortgage lenders are starting to outspeed themselves, that is promising quick mortgage confirmations and a more streamlined process, even offering cash bonuses if they don’t meet their target date. In 2018 it took an average of 43 days to close a home mortgage but now some lenders are doing it in 21 days or less.

One of the ways this is accomplished is of course through technology that can link banks to the loan application allowing the lender to obtain documentation and data directly. It may also be possible to have a remote closing, also speeding up the process.

In addition, with the blessing of Freddie Mac and Fannie Mae, some properties may be eligible for an “appraisal waiver,” the thought of which makes me shake in my sandals. Instead of Fannie and Freddie having more restrictions in the wake of the 2008 financial crises fueled by low down payments and many no documentation loans, the Housing Finance Reform recently issued has done the opposite, keeping the American taxpayer on the hook for loan defaults.

However, mortgage rates are approaching 4 percent which will hopefully jump-start the housing market. The average 30-year fixed rate mortgage during the first week of April fell to 4.06 percent, the lowest since January of 2018. Freddie Mac said the rates have been dropping quickly as much as a quarter point in one week, the biggest drop in over a decade. Naturally, mortgage applications increased by 8.9 percent in early April.

I’m not sure how I feel about the link to your bank but other than that I’m all for a speedy process, which can be very important if you have an all-cash buyer who has suddenly shown interest in the home you want. So future homebuyers, as you start stepping back into the market since you can’t resist the interest rates, just remember less is more, in mortgage processing and in cooking.

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Traffic, real estate sales up

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

If you want to know why you’re starting to analyze traffic patterns so you can plan your trips to the supermarket, doctor’s office and Trader Joe’s, here’s the reason. During 2018, Sarasota and Manatee counties had more closed sales, an increase in overall inventory and a rise in median prices compared to 2017.

Sarasota single-family median home prices increased by 5 percent to $282,500, and Manatee single-family median home prices increased by 1.9 percent to $300,475 from 2017. Sarasota median condo prices increased by 3.2 percent to $232,300, while Manatee median condos increased by 5.8 percent to $190,500.

Meanwhile, the volume of single-family home sales in Manatee increased by 7 percent and in Sarasota, the increase was 0.5 percent. Condo sales in both counties as reported by the Realtor Association of Sarasota and Manatee, recorded the highest number of sales over the last 10 years. Sarasota increased by 8.1 percent and Manatee increased by 11.1 percent.

These are great numbers especially when you look at them compared to last year’s sales number as reported by the National Association of Realtors. Nationally, last year was the weakest for home sales since 2015 with buyers pulling back because of rising mortgage interest rates, a shortage of starter homes and a volatile stock market. However, the February home sales of previously owned homes nationally were up 11.8 percent, the largest monthly gain since 2015, obviously due to the lowering of mortgage interest down to 4.28 percent in March from 5 percent at the end of last year.

Let’s take a look at Manatee County’s February closed sales reported by the Realtor Association of Sarasota and Manatee:

Closed single-family sales were up 4.8 percent, the median sale price was down slightly by 0.5 percent to $298,500 and the average sale price was up 2.6 percent to $389,119. Median time to sell was 97 days up a little from 93 last year and the month’s supply of available properties was 4.5 months – no real change.

Condo sales were down, closed sales were down 14.9 percent, the median sale price was down 11.4 percent to $189,000 and the average sale price was also down by 10.9 percent to $227,849. Median time to sell was up to 101 days from 94 and the number of months supply of available properties was up to five months.

Keep in mind these types of statistics are a snapshot in time and there are a variety of things that can influence sale prices and sale numbers in any given month. It’s the overall picture for a sustained period of time that really tells the story, and the year over year story for Manatee and Sarasota Counties is spectacular.

The months of March and April traditionally experience the most closed sales, so I look forward to when those numbers are compiled before we head into our slower summer season. That said I may have to revise that statement down the road since there doesn’t ever seem to be a slow season anymore.

It goes without saying that Florida’s Gulf Coast is one of the most beautiful areas in the country.

We have beaches, sun, culture, low taxes and great choices when it comes to purchasing a home. And what comes along with all that is more people, more cars and overbooked restaurants, even Sarasota Airport is reporting a 35 percent increase in traffic during February this year, but would you change anything?

It just might take a little better planning.

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Should you digitally – or actually – renovate?

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

There comes a time in every homeowner’s life when they are faced with the dreaded renovation question. Frequently this question comes about when you’re thinking of putting your home up for sale. There is no doubt that move-in ready homes sell faster and sometimes for more money, but is this a job that you should tackle, or hire professionals?

If you’re convinced that do-it-yourself is the way to go, there are some websites to check out. Old House Online, Young House Love, and How To Sand A Floor will provide more information than any normal DIY project will ever need.

However, know your limits and leave the electrical, plumbing and structural repairs to the experts who will do it within current building codes and not burn the house down. But if you like getting your hands dirty, do your own demo. Naturally, make sure that the wall you’re taking down isn’t structural and doesn’t contain the plumbing to the toilet.

Certainly, the least difficult do-it-yourself job is painting. Exterior painting will be easier and look more professional if you power wash first, removing dirt, mold and peeling paint.

Even if you’re not a carpenter, replacing window and door moldings are pretty straightforward and forgiving of mistakes. Refinishing hardwood floors may be backbreaking but doesn’t require a master craftsman. And finally, know when to give up. If the project is not going well, your spouse isn’t talking to you and the kids are wearing gas masks, it may be time to make that phone call.

There is, of course, another way to go, there always is and with modern computer technology, you can have a virtual renovation if you’re selling your home. Since almost every home search starts with an online search it’s a great way to make your home stand out even if it’s slightly fudged.

Homeowners can take down walls, remove paneling, add swimming pools, garages and even turn your brown lawn green and make your dead plants bloom. This is a long way from the old school marketing of staging homes with rented furniture, pictures and knickknacks. Now all of that can be done digitally making an empty house looked lived in and inviting.

Sounds great right? The problem is when non-digital people come to look at your digitally-enhanced house and want to know why there’s a patio where they thought a pool was and what happened to the hardwood floor.

Needless to say, digital enhancements should be disclosed, and the National Association of Realtors code of ethics requires agents to present a true picture of the property in their advertising and marketing. Problem is since although the technology has been around it is now just starting to be widely used and guidelines for homeowners and agents alike still need to be established. If you watch any of the property renovation shows on HGTV you’ll see exactly what this technology can do to completely change the look and functionality of a home, and why it can be so misleading.

If taking advantage of this type of technology to market your property either personally or through an agent sounds like just the thing for you, full disclosure is a must. I’m not saying don’t to do it, it could bring a lot of eyeballs to the website as long as those eyeballs know what they’re looking at.

On the other hand, doing it yourself or hiring someone to move the wall and install the pool could make life ethically easier. The options are endless.

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Technology can’t replace real estate brokers

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

Technology has done as much to change the real estate industry as Henry Ford did to change the production of automobiles. However, where Henry Ford brought the cost of cars way down with his technology, the real estate industry hasn’t adjusted their fees. But before every real estate broker within 50 miles of Anna Maria Island starts calling me, let me give you the pros and cons of this debate.

Yes, it’s true that house hunters can go online and see virtually every house on the market in their chosen area. It’s also true that buyers frequently call brokers after they have sifted through the online housing inventory and are ready to get inside the property. And yes, it’s also true that brokers are saving a lot on gasoline by not driving customers around for days on end as we all did years ago. But none of this tells the real story.

Let’s start with selling your home and determining a listing price. It’s pretty easy to gather a bunch of comparable properties that have sold in your area from realtor websites and county records, but are they really comparable? You haven’t been inside these properties, so you don’t really know how they compare. Active local brokers have been in a lot of closed properties and they have the ability to analyze selling prices and recommend where your house should be listed. If your house sells fast because it was priced correctly, you’ll quickly forget about the real estate commission.

How about showing your home. Do you want to field calls and schedule appointments with buyers who may not be qualified financially or who may just be kicking tires? And don’t dismiss the importance of negotiating once a buyer comes forward with an offer. No matter how successful you are in your business life, negotiating real estate offers are a different animal, the element of emotions when you’re negotiating on your own home can’t be overstated.

Finally, here in Florida, it’s not uncommon to be selling to an out of state or out of country buyer. Navigating the details of these transactions can be tricky unless you have someone who has been through it. Not to mention selling a property from out of state that needs to be cleaned out and ready for sale, another job that Florida brokers are set up to do.

What about buyers, why do they need to call a broker after they’ve done all the work on their smartphones. If you’re sitting in New Jersey in February looking at beach properties on Anna Maria Island they all look great. You really need the advice of a local broker to educate you especially in a specialized area like Anna Maria Island.

Are you relocating permanently and need advice about schools, are you buying a second home and need advice about rental possibilities, or do you simply want to know the quality of the restaurants in the area? All of this, the really important and the really not so important is where someone with years of local knowledge becomes crucial.

I love the real estate technology available to everyone today, I love that you can see every property that’s on the MLS, but this technology has been around for about 10 years and real estate professionals are still going strong. There must be some reason, maybe the brokers just decided to get out of their cars and realigned their priorities. Just like Henry Ford, technology is meant to enhance not replace.

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Good news and good news

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

It’s been a while since we had positive news about how the national real estate market was trending. The little black cloud hanging over the head of the market has included a shortage of inventory, first-time buyers being priced out of the market and raising interest rates. Well, we may be seeing the black cloud starting to turn a little grey.

A couple of weeks ago, the U.S. Census Bureau released homeownership figures for the fourth quarter of 2018. The level of homeownership increased to the highest level in five years from 64.2 percent to 64.8 percent. This may not seem like a significant change, but it is a positive indicator of the real estate market shifting back to ownership from renting. The U.S. Census Bureau further states that the U.S. added about 1.7 million owner households in 2018 and lost 167,000 renter households.

Economists are interpreting this as a small but positive movement in the market, in conjunction with lower interest rates and a slight leveling off of listing prices. This may be just the thing some younger and first-time buyers need to put them on the path to homeownership.

And what about interest rates, are they really a lot better? Well, it depends what you’re comparing them to. Taking a look at 2017 and 2018, it appears the low point was December 2017 when a 30-year fixed rate mortgage could be obtained for as little as 3.93 percent. After that, the rates started climbing during 2018 when in November of 2018, they reached 4.94 percent. Then rates started declining to pretty much where we are now in Florida of between 4.36 and 4.40 percent. It’s important to understand that all of the rates we’ve been experiencing during the past three years are all good and all staying below 5 percent, a number that some of us would have envied in past years.

Another interesting thing about interest rates is that all states are not created equal. Three things that have a big influence on the mortgage rates offered in individual states is the cost of doing business in the state, the amount of competition among local mortgage lenders and foreclosure regulations. A state that requires a longer and more expensive foreclosure process will surely have higher interest rates built in by lenders. And in case you’re interested, New York state currently has the highest mortgage rates and, believe it or not, California has the lowest.

However, none of these issues have as much influence on the mortgage rates offered as an individual’s credit score. The lowest rates always go to the applicants with the highest credit scores, so keeping your bills current is especially important if you’re thinking of applying for a mortgage or a refinance.

And for first-time mortgage holders, don’t be surprised if your mortgage is turned over to a “servicer” to administer the mortgage – that is, collect your escrow and pay your property taxes and possibly insurance premium on a schedule that benefits you. Also, it’s always a good idea to verify that these two payments are paid on time by the lender or the servicer before you get a notice from the county or insurance company.

For a while, homeownership was somewhat out of style, particularly after the housing bubble burst. Not only did younger buyers lose faith in homeownership, but they also couldn’t afford it and decided the homeownership lifestyle was maybe not for them. But apparently, the American Dream is alive and well. I think it just took a little nap.

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Are you smarter than a hedge fund manager?

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

The most expensive home in U.S. history was just sold. It’s a four-story condo on Central Park South in New York City dubbed “billionaire’s bunker” and closing for $238 million. The buyer is a hedge fund manager who collects houses around the world so no surprise that the Big Apple was next on his hit list.

Those of us who live a little closer to earth will be interested in my latest three-month analysis of properties in the three cities of Anna Maria and Cortez that have sold or are listed over $1 million. This time we’re looking at November and December 2018 and January 2019. The residential closed property numbers are from the Manatee County Property Appraisers Office and the available or pending properties as of this writing are from realtor.com which reflects properties listed on the multiple listing records.

The little area of Cortez did not have any properties closing over $1 million during these months. The previous analysis was for a four-month period and showed two properties closed. The combined cities of Holmes Beach and Bradenton Beach closed 7 properties ranging from $2,300,000 to $1,050,000. The four-month analysis previously showed there were 14 properties closed. The City of Anna Maria closed 14 $1 million or over properties ranging from $3,300,000 to $1,010,000. The previous four-month analysis reported 17 closed properties over the $1 million mark.

Although the sold properties appear to be a little lower considering we’re comparing three months to four months during the holiday season when there aren’t too many serious buyers around, I think we’re just fine.

The available properties are another story, every location is up considerably from the last analysis. Starting with Cortez, there are currently 6 over $1 million properties on the market or pending, ranging from $1,500,000 to $1,100,000, the last analysis had five.

The combined cities of Holmes Beach and Bradenton Beach have an incredible 85 properties $1 million or more currently on the market or pending. The range is from a high of $9,500,000 to $1,049,000. There is one listing which happens to be land for $7,775,000; one property over $5 million; two properties over $4 million, five properties over $3 million and 16 properties over $2 million. The balance of the properties are between $2 million and $1 million. The previous analysis had 68 properties on the market.

The City of Anna Maria is also listing more properties than during the previous analysis. As of this writing, there were 58 either available or pending properties ranging from $5,496,000 to $1,065,000. There are two over $4 million; three over $3 million and 15 over $2 million; the balance of the available properties are between $1-2 million.

Lest we forget, it’s early March and the buyers are just starting to sniff around.

When you see the listing prices of the island properties lined up in a row it’s a little mind-blowing, considering what you could buy on the island in previous years. It may not be as mind-blowing as the price tag on a home in a 1,000-foot-tall tower with a view of Central Park, but we have our own views and we’re sticking to them. Are we smarter than a hedge fund manager? You bet we are.

More Castles in the Sand:

House hunting – the fun and not so fun

Florida’s new foreign buyers

A home’s equity is sometimes subjective

Castles in the Sand

House hunting – the fun and not so fun

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

I love technology and, although I may not be as well-versed as a 12-year-old, I do feel that for my generation I’m pretty competent. One of the best parts of the high-tech world we’re living in is the multitude of information on real estate at our fingertips. It also can be one or the worst parts of the high-tech world, especially if you’re house hunting.

Shopping online has become more than just a pleasant past time, it has become the go-to form of research for so many things, and house hunting is at the top of this list. Realtor.com makes it so easy to find homes in the zip code, price range and style you’re looking for that it will convince you to stay in your pajamas and make an offer from the bed, but that would be a whopper of a mistake. Online pictures are fabulous. Where else can you peek into someone’s home unobserved? But be careful – the wide-angle lenses typically used in real estate listings make small spaces look deceptively big and water views look endless. Naturally, pictures don’t show flaws in the property like cracked tile, torn screens and mold. Even renovated kitchens and baths will look better in pictures than in person.

The only way to thoroughly check a property is to get out of your pajamas, into the car and set eyes on it. The best thing to do is to use your online research as a guideline to help you pin down a location and get educated in price ranges.

In conjunction with that, getting a home value estimator online can also be a misleading and time-wasting effort. Unless you’re looking at cookie cutter homes or identical condo units, there are too many variables that go into setting the value of a home. Even then, the estimators can’t tell you about renovations and they also can’t keep current with market conditions.

But real estate professionals can keep current with markets and they generally have a pretty good idea about the condition of available properties in your price range and location. That said, remember that all real estate agents work for the seller of the property. The seller pays the commission. Unless you work with a buyer’s agent, be careful not to disclose too far ahead of time your interest in a property and/or an acceptable price for the property, especially if you meet an agent at an open house.

Almost all condo properties and many single-family homes and villas in Florida have homeowners’ associations. Don’t take this lightly. Thoroughly read the condominium rules and regulations, by-laws and financials. Condo boards are very powerful and can and will limit some of your activities. They also have the power to levy assessments. Not all of this is a bad thing; well run HOAs keep the values up and owner’s responsibilities down.

Finally, there are no perfect homes so don’t pass on a property because it may not have the exact color countertops or appliances you want. Changes and improvements you think you will need to make can be a good negotiation point and a little elbow grease could turn into thousands of dollars in real money.

House hunting is like marriage, best approached with good humor and compromise.  If I’m correct, I think you can do that online also. That would have been right up my alley. Where was the 12-year-old when you needed them?

More Castles in the Sand:

Florida’s new foreign buyers

A home’s equity is sometimes subjective

Why is the housing market declining?

Castles in the Sand

Florida’s new foreign buyers

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

I was born in New York state and up until 20 years ago when I moved to Florida, lived my entire life in the New York City and surrounding suburban area. There have been innumerable times during those years when I missed my old home, but frankly, this place in time is not one of those.

About a month ago, I reported the findings of the U.S. Census Bureau’s recent analysis. According to it, Florida was the second fastest growing state in the country after Texas based on an eight-year period ending 2018. In addition, Florida had the highest level of net domestic migration from July 2017 to July 2018, according to the U.S. Census data released in December. Also, Florida has been creating jobs, gaining 231,000 jobs in 2018, a 2.7 percent increase over the previous year. This brought the Florida unemployment rate down to 3.3 percent in December.

Governors and public officials in New York and other high taxed states like New Jersey, Illinois and Connecticut are looking for an excuse to blame the reason residents are leaving their states as well as their state deficits and high taxes on the federal government’s cap on state and local taxes. There is some truth to this contributing to the states’ shortfalls, but not everyone is leaving because they can’t fully deduct their property taxes. Maybe the real question is “Why are these states’ taxes so high to begin with?” Even though Floridians are benefiting from the North’s problems, rather than gloat we should be paying careful attention not to make the same mistakes.

An analysis by Zillow shows the preliminary data indicates a jump in Florida home purchases by buyers from high-tax states, as well as home values increasing in other low-tax states. According to real estate brokers in the Miami area, the loss of their foreign buyers has been replaced by buyers from New York, Florida’s new foreign buyer. Considering that Manhattan co-op and condo sales last year were down 12 percent from 2017 and that New York state was the largest overall population loser, you have to take the census reports seriously.

Down here in Manatee County, we’re ready for all of those tax-soaked Northerners. Just take a look at the January sales numbers from the Realtor Association of Sarasota and Manatee.

For single-family homes in Manatee County, the median sale price (half above half below) was $309,000, 3 percent more than last January. The average sale price was $386,927, exactly the same as last year. Median time to sell was 97 days, up 4.3 percent, and the month’s supply of properties available for sale was 4.4 months, no change.

The condo market is doing better. The median sale price was $195,000 this January, a 13 percent increase over last January, and the average sale price was $241,191, a 10 percent increase over last January. The median time to sell was 94 days, an increase of 11.9 percent, and the month’s supply of properties was 4.7 months, down from 5 months.

Again, the market looks like it’s leveling off as previously stated. However, we have not hit the busy selling and buying season yet, so the jury’s still out.

I guess after 20 years, I’m a Floridian. After all, if Amazon decided not to move to New York City after the city giving it billions of dollars in credits, who am I to whine? My advice to Island brokers – better check out advertising rates in The New York Times. I think it just might be the right time.

More Castles in the Sand:

A home’s equity is sometimes subjective

Why is the housing market declining?

Selling your home – it should show like a model

Castles in the Sand

A home’s equity is sometimes subjective

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

Are you familiar with the expression, “The happiest days of a boat owner’s life are the day he buys the boat and the day he sells it”? It’s not unlike homeownership. The happiest day is the day you walk into your new home deed in hand and the worst day is the one when your real estate broker tells you it’s not worth what you thought.

Last week we talked about the national real estate market cooling off in terms of the number of sales and selling price. We also are beginning to see some signs of this on Anna Maria Island with an overall leveling off of our recent outstanding market. It’s not necessarily a bad thing in a go-go market to take a pause and attract new buyers into the circle, but first homeowners need to readjust their expectations.

Freddie Mac’s chief economist coined the phrase mental recession, not a real recession only the perception of a recession. The danger of the mental recession is that it challenges your mental equity.

We all know that the definition of equity is the difference between the value of the asset (your home) and the value of the liability (your mortgage). Even though you won’t find mental equity in Webster’s Dictionary, all real estate professionals know exactly what it means. Essentially, it’s the value of a property in the homeowner’s mind and only in his mind. Whereas, the actual value of the property is based on comparable sales, location and the climate of the real estate market at the time. Frequently, these two values can be light years apart. Get the picture?

The point I’m trying to make is that real estate markets are dynamic. They’re always in flux, and buyers and especially sellers need to understand that last year’s values may not be this year’s values. Don’t get too comfortable with the mental equity because it can change in a heartbeat for both good and bad.

If you’re a buyer, Valentine’s Day was last week. Don’t fall in love based on previous sales until you’re sure the market will hold. If you’re a seller, turn the reality check button on in your brain and don’t turn down any offers no matter what your brain is telling you. Mental equity is not your friend; don’t get too cozy with it.

All of that said, we are just starting the busy selling season, which continues until about April or May when visitors and potential new residents feel comfortable enough to make an offer on available properties. And based on recent census numbers, there should be plenty of them. As previously stated, Florida’s population increased by 322,000 residents last year alone and is the second fastest growing state in the country.

However, some of those wanting to relocate to Florida could be faced with a slowing market where they’re coming from, particularly big city areas in the Northeast and Midwest who will be most affected by 2018’s change in federal tax deduction.

Everyone needs to keep their options open and flexible. Don’t allow your mental equity to make you mental and make sure that your first day of homeownership is indeed one of the happiest days of your life.

More Castles in the Sand:

Why is the housing market declining?

Selling your home – it should show like a model

Sunshine State population growth

Castles in the Sand

Why is the housing market declining?

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

It’s a curious situation the national economy is in right now. In spite of the stock market having a fit in December, not only did it make a strong comeback, but the employment statistics have remained strong. So why isn’t the housing market living up to the rest of the economy?

According to the chief economist at Freddie Mac, “We’re in a mental recession,” meaning bad news like the government shutdown, the stock market vulnerability in December, higher interest rates and international financial markets in a flux start to snowball, making buyers nervous. This is especially true for first-time buyers who are nervous to begin with and second home buyers who have the luxury to wait and see.

According to the National Association of Realtors, December was the weakest month for home sales in three years. December 2018 sales fell 6.4 percent from November of 2018, and 10.3 percent from December of 2017. Not unexpected, when the number of sales declines, the sale prices can’t be far behind.  The National Association of Realtors reports the median sale price for an existing home in December grew 2.9 percent from a year earlier, however, it was the smallest increase since March 2012.

Even the top two brokers on Anna Maria report that there were no significant price increases in 2018 and that the market appears to be stabilizing and leveling off in 2019.

Mortgage rates have come down in recent weeks and are now back to about 4.45 percent for a 30-year, fixed-rate mortgage, down from 5 percent two months ago. The Federal Reserve has also sent signals that it is carefully monitoring the interest rates as they relate to housing and the broader economy. This means to me that the rates will likely stay pretty much where they are for a while.

Stabilized interest rates and a slow-down in sale prices are not all bad news, especially for the first-time buyers that the market always needs to keep the ball rolling. One of the very real problems that first-time buyers face is the monthly payment on student debt, which may keep them from qualifying for a home or at least is making them concerned about keeping up payments, even if they do qualify. Student debt is now at $1.5 trillion, exceeding credit card debt and car loans, making a sizeable impact on the economy.

The Federal Reserve Bank indicates that homeownership among people ages 24 to 32 fell 9 percentage points to 36 percent from 45 percent between 2005 and 2014. As a comparison, almost 79 percent of people age 65 and older are homeowners; for ages 35 to 44, 59 percent are homeowners; and of all ages, 64 percent are homeowners. This is unfortunate because we desperately need these young buyers.

The Fed said that although many factors contribute to homeownership, 2 percentage points or about a fifth of the decline was tied directly to student debt. This represents 400,000 buyers who did not make a home purchase because of student debt. The Federal Reserve report finally gives us a better understanding of why the housing recovery has been weaker than other segments of the economy.

A strong real estate market is the driver of the economy in many areas since homeownership involves the purchase of goods and services needed to maintain the property. Hopefully, the country will get out of its mental recession soon, but don’t let that stop you from having a happy Valentine’s Day.

More Castles in the Sand:

Selling your home – it should show like a model

Sunshine State population growth

2019 tax nightmare