Skip to main content

Tag: Anna Maria Island real estate

Home sales and hurricanes

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

This is one of those times when I just want to put my head in the sand or at least lay on top of it and totally zone out. The weather is hot, hot, hot, the real estate market is cold, cold, cold and the threat of hurricanes is breathing fire down on us. Let’s start with the hurricanes.

Every hurricane prediction is in agreement that this will be an above-average season in the Atlantic Basin. The one I always look for is the Colorado State University forecast because I love that we’re getting our hurricane forecast from a landlocked mountain state. Nevertheless, their prediction is for 23 named storms, 11 hurricanes and five major hurricanes.

Before you put your head in the sand along with mine, remember that the Eastern Seaboard coastline is very long from as far north as Massachusetts to the southern tip of Florida and around into the Gulf of Mexico. My point is the hurricanes have a lot of area to choose from, but as they say, it only takes one and you have to be ready.

Anyone reading this lives either on the water or close enough to it that will require knowing your evacuation route, including emergency shelters and/or hotels or friends and relatives to evacuate to.

Get your three days’ worth of supplies for each family member where it is easily accessible. Nonperishable food, water, medications, first aid kit, flashlights, batteries, radio, cash, some clothing and important documents.

Secure your property, hopefully not the day before a storm is due, but how about right now? Window and door protections are at the top of the list.

Put away any outdoor projectiles, chairs, tables, toys, tree branches. If you have a garage, use it or move your vehicles to a more protected area. Get a backup power source, a generator, if you can arrange that. Turn off utilities, especially gas, and if you evacuate, leave your refrigerator and freezer free of raw meat or anything else that will go bad and damage your refrigerator if the power is off for several days.

Getting ready for hurricanes is one thing, getting ready for the real estate market is another thing. Let’s see what the May sales statistics show, released by the Realtor Association of Sarasota and Manatee:

Single-family homes closed 0.2% fewer properties than last May. The median sale price was $525,000, 1.9% lower than last year, and the average sale price was $709,406, up 3.4%. The median time to contract was 45 days compared to 32 days last year and there were 24.8% more new listings. The month’s supply of available inventory is 4.1 months compared to 2.7 months last year.

Condos closed 25.8% fewer properties compared to last year. The median sale price was $361,495, 5.5% lower, and the average sale price was $412,368, 32% lower than last year. The median time to contract was 56 days compared to 37 days last May, and new listings were down 5.3%. The month’s supply of available listings is 6.3 months compared to 3.4 months.

As you can see, the report of fewer sales and generally increased inventory is shifting the market to a potential buyer’s market. Condos are feeling the effects more than single-family, I believe partly because of the summer season, where potential buyers for winter condo retreats has declined. We’ll have to wait until the fall to see if this is the case; in the meantime, the condo market may continue to decline the further we get into hurricane season and warmer weather.

Meanwhile, be prepared for storms, stay alert and enjoy the warm Gulf waters.

Roofs: Need I say more?

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

It’s Florida, it’s hurricane season and your insurer is taking a good look at the most important thing over your head, and it’s not your favorite baseball cap.

It used to be that a roof needed to be replaced every 20 to 30 years, sometimes even 40 years depending on where you live and the material of your roof. Well, we live in Florida and it’s probably the worst environment for roofs in the country if you’re not including states north of Massachusetts where purchasing a snow broom and a variety of snow shovels are the norm.

To complicate the weather issues, we also have insurance issues which thankfully are starting to work themselves out. After a rising number of homeowners had their insurance policies canceled or their insurers refused to offer them coverage simply due to the age of their roofs, the Florida Legislature implemented new roof requirements for homeowners’ insurance in Florida in May of 2022. It’s not perfect, but the legislation has helped many homeowners.

According to the Tampa Bay Times: “Companies would be blocked from denying coverage because of a roof’s age if the roof is less than 15 years old. And for roofs that are older than 15 years, insurers would have to allow an insurance agent or homeowner to have an inspection on the roof’s condition before refusing coverage. If the inspections show the roof has five or more years of useful life left, the insurance company could not reject coverage simply because of age.”

Essentially, the legislation aimed to improve conditions for both homeowners and insurers. While insurers could no longer drop homeowners simply because of the age of their roof, they also received financial protection to cover their own losses. This reduced the likelihood of unnecessary roof replacements when repairs would be sufficient, lowering homeowner premiums and costs to insurers.

In addition, insurance companies can now offer policies that pay out the actual cash value for roofs over 10 years old rather than the cost of a full replacement. Homeowners can now opt to buy a policy with a stated value limit for roof coverage and lower payments based on a schedule for roofs over 10 years old subject to an inspection.

And while we’re talking inspections, any roof inspection should be performed by a certified roof inspector, not by a contractor who may have an interest in installing a new roof. Inspectors can be found on certification organizations’ websites such as the National Roof Certification & Inspection Association.

A homeowner’s situation with their insurer is one problem facing them today. The other issue is buyers who want to know that they’re buying a secure and preferably new roof so they don’t have any insurance issues. It frequently comes up in negotiations, especially if a potential buyer hires a roof inspector. If you have an older roof, even if you haven’t experienced any leaks, be prepared to get pushback from buyers.

Finally, the type of roof you have is key to longevity. Metal roofs can last for 50 years. Concrete or clay tiles also last up to 50 years. Wood is more vulnerable and even the old standby asphalt shingles are also vulnerable to Florida’s weather. How insurance companies treat roofs that have a long life even if they are over 15 years old is going to be on a case-by-case basis.

Do what you can to keep the most important thing over your head in good shape by keeping up with repairs and adding roof straps or clips. At least you’ll be safer in a storm even if your insurance company isn’t happy.

Reinsurance causing rate hikes

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

I know, not more talk about insurance, especially a week after the beginning of hurricane season. But if the Wall Street Journal can put it on their front page, I can report it.

Reinsurance is apparently the reason for the increase in insurance rates around the country. And if you don’t know what reinsurance is, like it or not, I’m going to tell you.

Simply, as if anything related to insurance is simple, reinsurance is insurance for insurers. Reinsurance lets insurers sell policies in vulnerable areas without the risk of being wiped out by a single disaster. The reinsurance market is a global entity that spreads the risk globally, allowing local insurance companies to provide insurance in risky areas, like Florida.

According to the Wall Street Journal, the reinsurance market is unregulated and is one of the major drivers of the high cost of property coverage across the country. Last year this came to a head after the reinsurance companies suffered a sharp drop in profits and started raising rates and cutting coverage at the start of last year.

This, of course, has had consumer advocates complaining that reinsurer profits have come at the expense of homeowners. The advocates have called for a federal reinsurance program, similar to the national flood insurance program, to protect consumers from unrestrained cost increases. The reinsurance industry says they’re the wrong target and are only responding to the increase in losses in the home insurance industry.

Wherever the blame lies, at least in Florida there is a round of reinsurance renewals currently underway, as well as in other high-risk states, that will help determine whether more premium increases are in the future. Interestingly, insurance brokers who are tracking a round of reinsurance policy renewals in June say they expect premiums to stay fairly level in Florida; we can only hope. However, there is some new money coming into the industry which may help to lower prices assuming this year’s hurricane season is overstated even though this year’s prediction is calling for the largest number of major hurricanes ever forecasted.

Since everything related to insurance influences the real estate market, the increased cost of reinsurance will be affecting the availability of home insurance. If there isn’t insurance available or the cost of the insurance is unreachable for buyers, it will slow the real estate market. Nevertheless, Lisa Miller, a Florida-based insurance adviser, indicates the 2024 reinsurance costs are going to be better.

We don’t usually talk specifically about reinsurance since the cost of it has always been built into our insurance company’s overall costs. But it is now becoming an issue on its own and hopefully will help explain to the average homeowner why insurance has gone up and what the future may hold.

The good news for us is across the country, approved home insurance rates are higher in Texas, Louisiana, Washington state and several more states than in Florida. The West, including California, is exposed to wildfires and the Midwest, tornadoes, both of which can be just as or more devastating than hurricanes.

I guess what I’m saying is there are no risk-free places to live, but some reasonable legislation or big brains should get together and see what can be done for the average homeowner. Think that will ever happen?

Reverse mortgage loans explained

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

Anyone who considers themselves a senior, which I certainly do, at some point will probably have considered a reverse mortgage. It’s not a conventional mortgage designed for the majority of home purchasers but rather a vehicle for senior homeowners to tap into their home equity.

What exactly is home equity? Home equity is the amount of your home that you actually own. Specifically, the equity is the difference between what your home is worth and what you owe your lender or lenders. Don’t confuse it with “mental equity,” which is a term sometimes used in real estate where sellers think they know what their property is worth.

Seniors who are 62 or over can apply for a reverse mortgage, releasing some of the equity in their property. With property values increasing in the past three to four years, seniors who have owned their homes for a long time are considering reverse mortgages with an eye to staying in their homes. Homeowners are still responsible for paying property taxes, insurance and maintenance; however, the repayment of the loan is deferred until the homeowner dies, sells or moves out of the home.

In addition to being 62 or over to qualify, you also need to have enough equity in your home. The loan works by making payments to the borrower based on a percentage of the equity that has been built up in the home. The factors that determine the loan amount include your age, the value of your home, the interest rate and the FHA mortgage limit, $1,089,300 as of this writing.

The obvious benefit is that you can continue to live in your home and retain the title. The proceeds of the loan are generally tax-free cash, so you can use the money as you see fit for improvements and everyday living expenses. You choose the disbursement option; lump sum, monthly payout, quarterly, etc.

The primary drawback of reverse mortgages is that the loans are generally more expensive than other financial products. The balance of the loan increases over time as does the interest on the loan and the fees associated with the loan, eating into any home equity that is left.

If this is something that you might consider, the first thing you should do is attend a counseling session from a licensed third-party counseling agency. The Department of Housing and Urban Development (HUD) maintains a list of counselors available in Florida.

Next, research and identify companies that specialize in reverse mortgages. Factors to look for when evaluating companies are years in business, number of products offered, customer service availability, state licensing, Better Business Bureau (BBB) ratings and the inclusion of a mobile application. Once you have found a company you’re comfortable with, discuss what options may be available to you as far as qualification, timeline and any other questions you may have.

When the application is completed, the process is similar to a traditional mortgage application. The loan will go to an underwriter and appraiser and once approved, a distribution is made.

No matter what age you are, it’s tempting to look at all the equity you have in your home and convert it into a “piggy bank.” Like any loan where you reduce your equity, whether it’s a home equity loan, refinancing your current mortgage or a reverse mortgage, always remember that the funds you withdraw are real money and analyze what the effect of that could have on your future. Get professional advice and good luck.

Everyone’s talking about home prices

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

I challenge you to enter a room with at least four adult homeowners and not hear the conversation eventually gravitating to the price of homes.

Some of the conversation centers on fear that what their home is worth is just a moment in time and will completely disappear, others think they caused the high value of their home because they’re so smart and others probably think who cares, I’ll worry about it when it’s time to sell. Wherever you are in this conversation, the effect of home prices will have a major influence on your future.

According to a recent analysis by ResiClub of the Case-Shiller National Home Price Index, home prices have surged 47.1% since the start of 2020, easily outstripping the gains seen in recent decades. By comparison, home prices in the 1990s and 2010s grew a respective 30.1% and 44.7%.

In addition, home price growth so far this decade is on the verge of surpassing all the growth seen in the 2000s. During that period, housing prices skyrocketed 47.3%, including an 80% spike before the 2007 housing market crash.

There are several driving forces behind the spike in prices. Some of the reasons are underbuilding because of a rapid rise in mortgage rates and expensive construction materials. Available home supply remains down 34.3% from the typical amount before the COVID-19 pandemic in early 2020. Remember these are national profiles; what happens locally and especially in Florida does not always follow the national trend.

All of this is complicated by sellers who are locked into record-low mortgage rates and are reluctant to sell, further limiting the available supply of properties. Currently, about 80% of mortgage holders have a rate below 5%. That’s a lot of people who don’t want to move.

Nevertheless, prices continue to increase and, per the National Association of Realtors, the median single-family home price grew 5% from a year ago. This increase was confirmed in 93% of the metro areas in the country during the first quarter.

Two of the fastest-growing markets in the country, Texas and Florida, may be starting to see a softening of prices. Again, all real estate is local, so let’s see what the April sales statistics for Manatee County reported by the Realtor Association of Sarasota and Manatee look like.

Single-family homes closed 3.5% more properties compared to last year and condos closed 7.8% more properties compared to last year. Keep in mind these are lagging numbers for contracts probably written a couple of months before.

The median sale price for single-family homes was $530,000, down 7.0%, and the median sale price for condos was $352,420, down 7.5%. The average sale price for single-family homes was $718,603, down 2.3%, and the average sale price for condos was $435,292, down 3.7%.

The median time to contract for single-family homes was 44 days compared to 28 days last year, and for condos, it was almost the same at 44 days this year compared to 27 last year. New listings are up for both single-family at 17.1% and condos at 24.2%. Finally, the months’ supply of available properties is up to 3.9 months for single-family and 6.3 months for condos.

You don’t have to be a mathematician to see that inventory has surged, resulting in a more competitive market and longer selling periods. Selling prices are already down and could be further impacted because of the additional competition.

The best way to discuss what your homes are worth among friends is probably not to. No one gets the credit for it and no one will get the blame if prices start to level off. I’m with the guy who says, “I’ll worry about it when it’s time to sell.”

Lower your mortgage rate – it’s possible

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

Last week the big news was the escalation of mortgage rates and the prediction by the mortgage “experts” that we’re not seeing them being lowered anytime soon. This week we’ll touch on ways to maybe achieve a lower rate and help buyers get their foot in the door. There are a few strategies that could help buyers secure a lower mortgage rate now and revisit the loan down the road, but it may not be for everyone.

The first one is a temporary buydown in which a seller, or more frequently a builder, pays an upfront fee to reduce a buyer’s mortgage rate for a specified period of time. It can give a buyer, especially first-time buyers, time to ease into higher payments if they expect their personal incomes will rise in the future or if traditional mortgage rates decline. There are lenders that offer it, but typically builders use it as an incentive for home buyers instead of reducing their price.

There are a variety of temporary buydowns out there with terms that involve number of years and percentage of rate drops. However, all of the temporary buydown arrangements are based on the buyer qualifying for a mortgage based on the current mortgage rate as well as having a high credit score. If you qualify, it’s still worth it, especially in the early years of home ownership, which are always the most expensive.

Another strategy is buying discount points. Essentially what you’re doing is buying the prepaid interest at closing to reduce the size of the mortgage in return for a lower rate. The lower rate is for the life of the mortgage, which can be a substantial savings if you’re planning on living in the home for a long time.

The difficult part of buying discount points and the additional fees that are assessed is that you will require a large down payment. If you have the cash to do this, you need to determine the break-even point, which is the level you save more money than you spend. If this makes financial sense, it could be a good option.

Finally, assumable mortgages can help keep rates down if you can find one. This loan allows a seller to transfer his or her mortgage to a buyer who in turn picks up the remaining loan balance, the repayment period and other terms of the seller’s existing mortgage. All of this sounds great if the seller’s rate is considerably lower than what the buyer can secure at this time. Buyers still need quite a bit of cash to cover the difference between the loan balance and the selling price and they also need to qualify for the loan just like any other mortgage product.

There certainly are a lot of assumable mortgages out there, however, they are generally not conventional mortgages. Most if not all of these loans are government-backed or insured loans by the FHA or VA. It’s also not a simple process for either the buyer or seller and may require some legal advice for the novice.

Getting a lower mortgage interest rate in this financial environment is difficult, but if you have the means, the nerve and a little bit of luck, it could happen. In the meantime, sit tight and see what develops between now and the end of the year. The country is going through many changes and so are the mortgage markets.

Buyers losing hope

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

Tired of waiting for mortgage rates to come down? You’re not alone. Every potential buyer out there is waiting for the same thing, the problem is the Federal Reserve isn’t moving the needle, so it might be a long wait.

The Federal Reserve made no move in their last meeting in April, not up, not down. The good news is since they didn’t move rates up, it’s obvious they’re still fighting inflation, which simply refuses to budge. The stock market loved the status quo and enjoyed two big days thinking the Feds will eventually see the light and start reducing rates. Maybe yes, maybe no. Meanwhile, sellers who are desperate to sell their homes but don’t want to give up their low-interest rate mortgages are sitting back, and the buyers who were able to buy a lot more house three years ago are wondering what the heck just happened.

What happened is that in March of this year, a median-income household could afford to buy a house for no more than $416,000, assuming a 20% down payment. Three years earlier, that same household could afford a purchase price of up to $561,000, all things being equal. Then of course there are renters, 20% of them, who don’t expect to ever own a home based on a property management firm’s survey.

So, what are the experts saying? According to Forbes, Freddie Mac says mortgage rates will stay above 6.5% through this quarter. Fannie Mae is forecasting the 30-year fixed rate to average 6.6% in 2024 and 6.1% in 2025. The National Association of Realtors says rates will likely be in the 6% to 7% range for most of the year. The Mortgage Bankers Association predicts 6.7% in the second quarter and ending 2024 at 6.4%. Bank of America is anticipating a rate cut in December and is optimistic that mortgage rates will eventually drop below 7%.

There are, of course, more predictions but the common thread they all have is changing opinions from declining interest rates this year to a more modest prediction based on inflation. They also all agree that waiting to jump into the market is not a good idea. If you wait for interest rates to come down, you’ll be fighting an appreciation of values and likely won’t gain anything. Despite elevated mortgage rates, buyers can still look around for the best rate and at least move on with their lives with the option of refinancing the mortgage down the road.

Buyers, especially younger buyers and first-time buyers, may need to reevaluate what they really want. Do they want a home to build a life in or will they just be sitting in their rental and hope the Federal Reserve bails them out? And frankly, 7% is not such a terrible rate. Real estate markets have lived through, survived and even flourished with double-digit interest rates.

The best advice from economists is don’t wait. You can’t time the market and by now the buyers who have been trying to wait it out probably are well aware they may have made a bad choice. Don’t endure more pain; move forward and reorganize your life and assets to accommodate the reality.

Boomers continue to boom

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

Just when you think they’re too old to influence the smart, better-educated and computer-savvy younger generations, they raise their grey and balding heads again to remind their kids and grandkids they are still alive and influential.

For years, the prediction would be that boomers would start to sell off their big houses, flooding the market with properties. Instead, just the opposite is happening. Many aren’t even considering selling their large family homes, and for good reason.

Boomers own half of all of the $32 trillion in home equity in the country, according to a Redfin analysis of Federal Reserve data. In addition, nearly 80% of boomers own their primary residence and about a quarter own an investment property. More than half of them have retirement accounts with a median balance of $191,200, as well as 27% owning stocks and bonds outside of retirement accounts with a median amount of $201,800. These statistics come from a data scientist for the St. Louis Fed who researches wealth.

And it gets better. Not selling their properties has helped boomers accumulate a level of wealth greater than any other living generation. The median prices of existing single-family homes have increased more than tenfold since the early 1970s, when the oldest boomers were buying their first homes.

Even though boomers have a big financial incentive to stay in their homes with either no mortgage or very low-rate mortgages, some are moving on. Boomers made up 31% of home buyers, while millennials made up 38% in 2023, as reported by the National Association of Realtors. They frequently buy with cash, avoiding the higher interest rates in today’s market.

The boomers have had a major influence on the current real estate market. Mortgage rates topped 7% after the Federal Reserve’s last meeting when they held rates at their current level. That has pushed up the yield on 10-year treasuries, which mortgage rates tend to track. They also didn’t give any indication of lowering the rate any time soon based on the level of inflation, however, many economists still expect rates to decline later this year.

Even though new properties have been listed, there is a continuing low supply of homes for sale nationally. This continues to push prices higher with the national median existing-home price going up 4.8% in March from a year earlier to $393,500, as reported by the National Association of Realtors. The Manatee County median sale price for March by comparison was $498,805, 1.4% higher than last year.

Homebuyers are also confused about coming changes to the rules governing how real estate agents get paid and how this will affect their overall costs. And let’s not forget it’s a presidential election year, as well as one with several worldwide military conflicts bubbling up. All this influences home shoppers and sellers to perhaps pause until there is more clarity and less stress in the market.

The lack of boomer activity is, to a large degree, another byproduct of COVID-19, the pandemic that keeps on giving. As bad as COVID-19 was, it has worked to the advantage of boomers, increasing their equity tremendously and allowing them to refinance existing mortgages to a historic low rate.

The baby boomer generation has influenced everything that has gone on in this country since 1946, when the oldest of them were born, and they’re not going away. Whether it’s housing or the price of milk, boomers continue leaving their mark.

Cost of American dream rising

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

Owning a home of your own has been the American dream for over 75 years. It’s so embedded in our culture that it can create stress and feelings of low self-worth if you don’t own your own home. Unfortunately, that’s not about to change anytime soon.

The cost of home ownership increased so much last year that, according to a National Association of Realtors index, home ownership fell to the lowest level since 1985. The culprit here is the cost of increasing mortgage interest rates, insurance, maintenance, utility and homeowners’ association fees. Municipalities are also raising property taxes to keep up with their increasing expenses of running local government due to inflation. Even homeowners who refinanced when the rates were around 3% or 4% are still feeling the crunch, and first-time homebuyers are gradually being priced out of their own American dream.

The Labor Department reported that consumer prices rose 3.5% in March from a year earlier. The stronger-than-expected inflation data will likely prompt the Federal Reserve to hold rates at the current level for longer than expected. This could also keep mortgage rates frozen in place, further disrupting the real estate market, and keeping homeowners currently holding low-interest rate mortgages also frozen in place.

As I’m writing this, a Wall Street Journal update hit my iPhone reporting that the average rate on the standard 30-year fixed rate mortgage jumped by nearly a quarter percentage point to 7.1% based on a survey of lenders by mortgage-finance giant Freddie Mac. That is the highest level since late 2023 and the largest weekly increase in nearly a year. This is approximately double from three years ago. However, putting it in perspective, it is still a lot more affordable compared to the 1980s when rates were in double digits, ranging from 10% up to 16%.

So much of what goes on in the real estate market is dependent on unseen factors and sometimes even just a general feeling by the population that something is off. Let’s see if the March sales statistics are on or off as reported by the Realtor Association of Sarasota and Manatee:

Single-family properties closed 3.4% less than last March. The median selling price was $498,805, 1.4% higher than last year, and the average sale price was $653,281, 2.4% higher than last year. The median time to contract was 51 days compared to 46 last year, and there were 0.6% more listings than last year.

Condos closed 2.5% more than last March. The median selling price was $342,988, down 2.8%, and the average sale price was $429,893, 2.5% higher than last year. The median time to contract was 54 days compared to 23 last year and there were 14.9% more new listings than last year.

Inventory of properties is up to 4.1 months for single-family and 6.4 months for condos. Six months of available inventory is just about normal and something we haven’t seen in a long time.

The Realtor Association points out the counties have undergone significant changes throughout the first quarter of 2024. The National Association of Realtors reported the biggest monthly drop in sales in more than a year. This and other data suggest that we are transitioning towards market conditions that favor buyers including more negotiating power and an increased supply of inventory per the Realtor Association.

American dream or homeowner’s nightmare? Don’t lose faith, times have been better and times have been much worse, but the dream doesn’t go away.

Prepare for hurricane season

Written by Louise Bolger on . Posted in Business, Castles in the Sand, Hurricane Guide, Special Sections.

Call me crazy, but whenever the hurricane predictions are disclosed for the impending hurricane season it seems to always be the highest number of storms EVER. Well, this year’s predictions are again warning of an extremely active hurricane season, so batten down the hatches and tie up the kids.

According to the Colorado State University forecast, which came out on April 4, they are indicating 23 named storms, 11 hurricanes and five major hurricanes with between four and six making landfall. By comparison, a typical year averages about 14 tropical storms with seven turning into hurricanes.

The reason for this is a combination of very warm water in the Atlantic and La Nina, which supports more storms. Warm water gives hurricanes fuel and contributes to a more unstable atmosphere. Ocean temperatures in much of the Atlantic have been setting records for more than a year and scientists have been unable to fully explain why.

At the top of the preparedness list are always non-perishable foods and, although many cans have pull tops, it’s best to buy a manual or battery-operated can opener. Next is bottled water and buy it early because, with the prediction of a storm, the shelves are quickly emptied. Batteries, cash in case the ATMs go down in a bad storm, and a full tank of gas are a must. Battery-operated lights and flashlights with candles as a backup are also a must. Once storms are on the way, it’s too late to purchase storm shutters, but this is something you should consider long before you need them.

Charge up your smartphones and tablets and buy a battery backup. Know where your important papers are like insurance policies, school records, mortgage information, tax returns, photos and any other papers you might need in a hurry if your evacuation is longer than you expect. Also, take prescriptions and information to renew them in case you don’t get home for a while. Outside, remove any objects that can be blown away in heavy wind, furniture, toys, plants and awnings. Secure vessels that can’t be relocated with plenty of fenders and extra lines to accommodate the tides and turn off power to the boat.

Have an evacuation plan in place with either a friend or relative and prepare a list of hotels. Don’t forget the pets, their food and medications. It’s also a good idea to take current pictures and/or videos of the interior and exterior of your property for insurance purposes should you have damage.

The mymanatee.org website has a great deal of detailed information concerning everything I just outlined but in more detail. It’s worth taking the time to read it and implement some of their recommendations.

Finally, if you are in the process of selling or purchasing a new property, remember when storms are in the forecast it is usually not possible to bind an insurance company to cover the new property. This could delay your closing, but hopefully, everyone involved in the transaction will be cooperative.

It’s not all bad news. The hurricane season outlook from the National Oceanic and Atmospheric Administration isn’t due out until May. However, their forecasters are looking at some of the same problematic models. Nevertheless, we are all warned not to focus on these predictions since other factors come into play in how many storms we get and how strong they are.

My job is not to make predictions but to remind you to get your property and your family ready for the worst and hope for the best. Just assume it will be an active season and start stocking those cans and cases of water.

New world of home sales

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

The world is changing so fast with artificial intelligence, electric and self-driving vehicles and instantaneous information on every subject at our fingertips. For professionals who are members of the National Association of Realtors, their world has just been upended.

Last week we reviewed the National Association of Realtors’ landmark settlement regarding the agent commission system. The major conclusion of this settlement is that compensation in the form of commissions will no longer be shown on the multiple listing services. Listing agents can still negotiate commissions through private conversations and written agreements, but these agreements cannot be shown on the multiple listing website.

The disadvantage for sellers is that buyer’s agents do not know what their commission will be immediately and some of them may be reluctant to show the property to potential buyers without this information. Regardless of what many people believe, commissions have always been negotiable between the seller and their agents, the difference now is that this percentage is not obvious to buyers’ agents immediately. In an effort to work with this new ruling, brokers and their agents are looking for new payment models.

Starting in July, sellers won’t need to make an upfront offer for how much they will pay a home buyer’s agent. Sellers and their agents could, however, continue using the selling model that has been in place for generations and share the agreed-upon commission, it just won’t become part of the published listing agreement and will require buyer’s agents to call the listing agent and ask what their share of the commission is, another layer to an already busy job.

Flat fees for service provided might work as a new commission model. Under this approach, buyers would agree to pay their agent directly, but they could still choose to ask the seller to cover this cost. Asking sellers to cover the cost of mortgage points for the buyer has always been a part of the negotiation on a property in addition to other fees or a portion of property taxes, therefore, asking to pay buyers’ brokers is not a stretch for sellers.

Many customers like the flexibility of flat fees or hourly rate models which can significantly lower the fees paid to a buyer’s agent and might also work for selling agents. This would require the buyer or seller to perform more of the work to close out a transaction themselves but save on commissions.

It’s not as easy as it sounds. Paying for advertising, open houses and following up on inspectors, mortgage commitments and title companies is something realtors are accustomed to doing every day. Taking time out of your workday may not look as attractive once you have to make all of the phone calls yourself and the savings in money may not justify the time spent.

The National Association of Realtors provided these statistics: 86% of buyers purchase their home through a real estate agent or broker; 89% would use their agent again or recommend them; 51% found their home on the internet and 29% found their home through an agent; and for sale by owner properties accounted for only 10% of home sales in 2021.

No doubt agents will leave the business rather than deal with the complications of the changes and that’s a good thing. Since COVID there has been an influx of new inexperienced agents to the business. It’s not an easy job and anyone who has done it will understand that. No matter how much the world spins with changes every day, you can’t take away the importance of in-person contact with other humans, and that’s what realtors bring to the table.

Real estate in earthquake mode

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

The day I was scheduled to fly home from my visit to the wild, wild west, the news broke that the National Association of Realtors had settled legal claims relative to real estate commissions. When I finally returned home very early the next morning, I was faced with an avalanche of real estate information which I will attempt to boil down.

In a nutshell, everything about the way we buy and sell homes is in the process of changing. Traditionally, real estate agents’ commissions were paid by the seller out of the proceeds of the sale when the property closes and split between the selling and listing agents. Starting this summer, that long-standing model is being shaken to its core.

The NAR reached a nationwide settlement claiming that the industry conspired to keep agent commissions high. They agreed to abandon longstanding industry rules that have required most home sale listings to include an upfront offer telling buyers’ agents how much they will get paid. As a result, the commissions most home sellers have paid real estate agents for decades, generally between 5% and 6%, among the highest in the world, will be more negotiable. A note here, real estate commissions could be negotiable between the homeowner and the listing agent in the past, however, they always had to be stated on the listing agreement so the buyer’s agent knew what the split was.

Starting in July, most homebuyers will have to sign agreements saying how much their agents will be paid. If sellers don’t want to cover those costs, buyers might have to agree to pay their selling agent. If this arrangement stands, it will be particularly difficult for first-time buyers or buyers who don’t have a surplus of cash to pay agents out of their own pockets.

Most sellers at the outset will opt to continue paying the commission for the buyer’s agent, recognizing they need the buyer’s agent to help with their home sale. It is possible and likely that little will change for buyers and sellers in the immediate future. Sellers are accustomed to including the cost of a buyer’s agent in their sale price, but over time new brokerage business models could emerge as everyone settles into a different reality.

The entire real estate industry is based on the spirit of cooperation between buyer’s agents and seller’s agents. A lot goes on behind the scenes between these two brokers since it’s to their advantage to make the negotiations come together. I would hate to see this new world order create an adversarial relationship between the buyer and seller agents. I do believe that after the dust settles and agents begin to develop methods to work together to their benefit and the benefit of their clients, everyone in the transaction will find a way through it.

Remember that real estate transactions also affect mortgage brokers, title companies, inspectors and closing agents who are carefully watching what’s going on. The paperwork at the beginning will be confusing and may be difficult to explain to the buyers and sellers, but this is the hand the industry has been dealt. Next week, we’ll look at the effect on real estate brokers as a profession and some of the future possibilities.

The day the news broke about the first serious change to the real estate industry in decades happened to be St. Patrick’s Day. I’m still not sure if the industry had the luck of the Irish that day or just a wake-up call to the confusion it left in its wake. To be continued…

Save our homes

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

This column should be titled “Save our Taxes,” since that’s what we’re really talking about. However, saving on property taxes is part of the Save Our Homes benefits and portability transfers are another piece of this law.

In January of 2008, the Florida Legislature passed legislation that allows homeowners the ability to move an existing homestead exemption to a new homestead. If you are moving, you may be able to transfer or “port” all or part of your homestead assessment difference.

To transfer the Save Our Homes Benefit, you must establish a homestead exemption for the new home within three years of Jan. 1 of the year you abandoned or sold the old homestead. You must file the Transfer of Homestead Assessment Difference Form with the homestead exemption application. The amount of your portability will be reflected on your Notice of Proposed Property Taxes that is mailed in mid-August. If you do not qualify for portability, you will be notified by certified mail no later than July 1.

A portability exemption can be used each time you move and establish a new homestead, and it can be applied for if your new homestead is a higher value than your old homestead or if the just value of your new homestead property is less than the just value of your old homestead. The law was enacted in order to free up homeowners to move on from their homestead properties with low taxes and still protect to some degree the amount of taxes they pay.

The calculation is not straightforward and there are caps to consider. If you don’t yet have a property ready to purchase or have already purchased, you will not know for sure what the benefit will be right away. On the Manatee County Property Appraiser website under Exemptions/Portability, you will find a calculator and more information about this benefit. I found it was a challenge to calculate without knowing the exact purchase price and assessed value of the new property; nevertheless, it will give you an idea of the process.

Based on February sales statistics for Manatee County reported by the Realtor Association of Sarasota and Manatee, we are at a balanced market or getting very close to one:

Single-family homes closed 8.7% more properties from last February. The median sale price was $499,990, up 2%, and the average sale price was $722,563, up 13%. Median time to sale was 102 days compared to 88 days last year and there were 53.5% more new listings leaving us with a 4.2 month supply of properties.

Condos closed 0.5% more properties from last February. The median sale price was $349,493, down 5.5%, and the average sale price was $385,521, down 11.5%. Median time to sale was 93 days compared to 67 days last year and there were 28.1% more new listings, leaving us with a 6.2 month supply of available properties. Six months of availability has traditionally been considered a normal market.

Now that the market is adjusting to the benefit of buyers and sellers, utilizing the option of tax portability becomes even more valuable. Save our taxes will also save our homes ultimately, so enjoy another tax benefit Florida offers. You do need to wade through the paperwork, but it’s worth it.

Energize your home

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

When you think of energy you probably think of power used to generate light and heat. But have you ever thought of the type of energy that isn’t physical or chemical, the kind that can’t be seen?

When it comes to improving your home, there are forces beyond updating and repairing. According to energy healers, you need to harmonize the property’s energy and honor previous owners. Using ancient spiritual practices and healing arts unblocking creativity, and creating tranquility and rejuvenation will result in a safer, wealthier and happier home.

This is a lighthearted column for me, but more than a few homeowners and their realtors are taking it very seriously. Across the county, house energy specialists are being hired to reset and elevate the home’s energy, especially if they’re getting it ready for sale or a potential buyer is viewing the property with an eye towards its energy fields.

Some of the healing techniques are a Celtic space-clearing blessing, tarot cards and a drowsing pendulum, something I never heard of until I read it and then I had to look it up. Apparently, the dowsing pendulum is used to observe the motion of a pointer or stick as it changes direction responding to unseen influences. Interesting, I wonder how that would work pointing it at potential buyers coming into your home, if it points up, they’re good if it points down, forget it?

Another popular healing practice is crystal healing, which, according to professional energy healers, is an oversimplification of the power of crystals. Realtors who are always looking for a way to make their homeowners happy are getting on board with crystals positioned around the inside and outside of the home to usher in vibrancy and aliveness. This process could come with steep fees in the thousands, not including the crystals and tarot cards.

I’m having some fun with all of this since my brain is more left-oriented than right, leaving my creative abilities and invisible energy untapped. But what do I know beyond the value of a renovated kitchen and spa tub? I do, however, have some interest and faith in feng shui.

I love the idea of a red entry door; aside from the fact that it looks smashing, it does encourage good energy to come in hopefully along with a good buyer. Red front doors mean good luck, protection, prosperity and the fire energy it represents makes the property stand out while promoting wealth and inspiration.

The other thing about feng shui that appeals to my left brain is following some basic house-selling rules. Declutter – open neat space allows the energy to flow and not get stuck, probably on your toddler’s three-wheeler hanging out in the kitchen. Soft colors, plants and strategic lighting are things realtors emphasize on a regular basis but are also elements of feng shui. The Chinese also like water elements in and around the home – that should be easy on Anna Maria Island – comfortable furniture (no wicker please) and natural textures.

I may not get the whole crystal energy thing but every homeowner needs to find their comfortable environment and how to achieve it. Since I love a lot of things associated with Asia, the food, the furniture and I do play Mahjongg, feng shui fits my sensibility and is acceptable to the left side of my brain.

Energy is powerful. Use it to your advantage.

Declutter, depersonalize, clean

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

After perusing what I like to consider my very organized database of columns, I realized it’s been some time since I wrote about getting your house ready for sale. Since we are dead in the middle of the busy selling season, it may be time for a tune-up.

According to the National Association of Realtors, more than 40% of buyers look at listings online as their first step. Because of this, you need to have excellent and clear pictures of your home done by a professional photographer experienced in real estate listings.

Before the pictures are taken you need to declutter, depersonalize and clean your home within an inch of its life. Out of the three of these, cleaning is by far the most important and the most obvious to buyers when they walk in the front door. Even if you are a good housekeeper or your regular housekeeper does in your opinion a good job, you should consider hiring a company that specializes in deep cleaning. Dust building up in corners and on baseboards, fans – especially high ones – and bits of mold are frequently overlooked when you’re living in a home day to day.

Next is decluttering and packing away excess furniture and things you don’t need for everyday living, including any items overstuffing your closets. Not only will this make your home appear cleaner and more spacious, it will also give you a head start on packing for your move.

Not everyone views clutter through the same eyes. Kitchen countertops cluttered with toasters, air fryers, two kitchen types of coffeemakers, countertop ovens, panini presses and every other type of small appliance we’ve all been guilty of buying and infrequently using should be put away. All of this also applies to bathrooms – hairdryers, electric razors, 10 different types of shampoo and crème rinse is something buyers don’t need to know about.

We all have collectibles and souvenirs from vacations and gifts from family members displayed around our home. Well now is the time to decide that the plastic hula girl statue your son insisted on bringing back from Maui has to go and pack away everything else that you aren’t attached to.

The part of the decluttering process that is the most painful is the pictures. Family photos are wonderful reminders of weddings, vacations and those big special moments in our lives, however, don’t forget this is your life, not a potential buyer’s. Family photos also can become a distraction for buyers touring your home. Everyone is a little curious by nature and they love to stop and look at your daughter’s wedding and your children’s first day of school down through the years.

All of this declutter advice also is important on the outside of your home. Whatever you can do to perk up the curb appeal with flowers, trimmed lawns, fresh paint and pressure washing will be helpful.

It should go without saying that all appliances and systems be in working order along with any booklets about them and the year they were installed.

After you have done everything above, the final cleaning job is to clean the windows. Again, a professional window cleaner will do wonders at least until it rains again. Plan on having him or her on retainer while your home is on the market, especially if you live on the beach.

I think I’m done, at least for the big stuff. The object is to set a stage that will make the buyers feel they can make your home their home where they aren’t distracted by personal items and want to stay awhile. Hopefully, it will be a busy season and you all have successful transactions; good luck.