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Tag: Manatee County real estate

Castles in the Sand

Real estate potpourri

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

Think of the real estate market as one big pot. Into the pot you throw in the asking price of a property, selling price, availability of properties, mortgage interest rate and your personal credit score. When you analyze all these ingredients, you’ve got a pretty good idea of the active real estate market and your ability to purchase.

Last week we discussed the Manatee County sales for the month of February, in which closed sales were down and the median selling price was up for both condos and single-family properties compared to last year.

Nationally, however, sales of single-family homes were down over twice what ours were, 22.6% compared to 10%, according to the National Association of Realtors. Nationally, the median single-family sales price fell 0.2% compared to last year to $363,000. Manatee County’s median single-family selling price was up 2.5% to $490,000 compared to last year. So far, our local market, although slowly adjusting, is outpacing the national market.

As for interest rates, as of this writing, the average 30-year fixed rate is just below 7%, which generally gives a boost to the number of sales. Remember last week we talked about buyers being “rate sensitive” – this may wake them up. However, the Federal Reserve at a March meeting raised the baseline rate by a quarter percent, hinting that they may be slowing down these regular increases. Every time there is a rate increase, we hold our breath to see what, if any, impact there will be on the home mortgage market.

I also noticed the number of cash buyers is gradually going down every month. In February, cash buyers for single-family homes were down 20.5% from a year ago and cash buyers for condos are down 23.9% from last year. It’s hard to say how much impact interest rates have on cash buyers. Buyers with cash frequently offer an all-cash contract, which enhances their negotiating ability, and then take a mortgage on the property after closing. With higher and fluctuating interest rates, that will likely change the cash buyer’s thinking on this strategy.

Finally, with interest rates higher than a year ago, credit scores are more important than ever. A small boost to your credit score can make a big impact on the cost of buying a home. Raising your credit scores in the time before applying for a mortgage is the most tangible way to reduce costs related to purchasing a home. You may not have any control over the increase in prices or lack of inventory, but credit scores are totally in your control.

The object is to get that credit score at or over 760 to obtain the most advantageous interest rate. The first thing to do is look at your credit report from all three of the credit reporting agencies. Check for errors, such as someone who has fraudulently attempted to get credit under your name, if a loan is not recorded as paid or a credit card you dropped is still showing as active.

Don’t apply for any new credit or financing until your home shopping and mortgage application is completed. If possible, pay down your debts or ask for a higher limit on your credit cards. Lenders consider how much debt you have compared to how much your line of credit is. It’s always better to have more credit available even if you don’t need it.

I never said it wasn’t complicated to buy a home and a potpourri of knowledge is essential. Shakespeare’s witches may say that the real estate market is all trouble and toil, but in the end, it’s all worth it.

Castles in the Sand

Rate sensitive

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

Mortgage rates appear to be controlling the real estate market across the country. My new favorite term is “rate sensitive.” This means that a buyer who would have been happy at 6.75% ran for the hills when the rates rose to 7%, about where they are as of this writing for a 30-year, fixed-rate mortgage.

I’m not dismissing the importance of rate increases in real money to buyers’ budgets, but nevertheless, a lot of them are walking for not a lot of money. To be fair, a one-point increase in a mortgage rate would have the same effect on affordability as a 10% increase in home prices, per First American Financial Corp. This could eliminate the buyer from qualifying for the home they are currently considering, lower their home buying expectations or cause them to disappear completely from the marketplace.

Earlier in the year when the rates were solidly in the 6% or a little over range, buyers were on the move. This may explain why our Manatee County statistics this

month show more pending properties in February 2023 compared to January 2023 even though the annual trend has been going down monthly. This was a surprise to many professionals in the housing market who now think that gain may be given back. The general consensus is that buyers now are much more cautious and are paying more attention than the people that were buying last year.

Here are the February sales statistics for Manatee County reported by the Realtor Association of Sarasota and Manatee:

Single-family homes closed 10% fewer properties than last year. The median selling price was $490,000, up 2.5% from last year, and the average selling price was $639,562, down 7.7% from last year. The median time to contract was 39 days compared to six days and the month’s supply of properties is 3.1 months compared to 0.6 months last year.

Condos closed 21.1% fewer properties than last year. The median selling price was $369,900, up 13.8%, and the average selling price was $435,748, up 17.3% from last year. The median time to contract was 29 days compared to 5 days and the month’s supply of properties was 3.4 months compared to 0.5 months last year.

March and April generally are busy months for closings in Florida before buy- ers return north. The next two months may tell a slightly different story, but there is no doubt that higher interest rates are having an effect.

One quick note about your home’s as- sessed value. Property taxes across the country have risen in recent years based on the increased value of your home. When you receive the new assessment and tax bill, don’t just file it in one of those folders that you’ll never look at again. Read it over for errors that could be anything from the size of your lot to the size of your home and the size of your new pool. Don’t be afraid to contact the assessor’s office and review this with them.

It’s also a good idea to stay on top of the recent sales in your neighborhood. Zillow, Trulia and Realtor.com will give you just about anything you need to know in addition to the Manatee County public records. If you really feel your home has been appraised higher than it should be, you can ask a licensed Realtor for an evaluation or a licensed appraiser. A Realtor may prepare an evaluation as a goodwill measure, but a licensed appraiser will charge a fee, however, an appraiser’s evaluation may hold more weight. And don’t forget to apply for any exemptions you may be entitled to.

We are living through a sensitive time for just about anything related to finances. Keep the tissues handy and your head on straight.

Castles in the Sand

Condo ownership and Florida law

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

I have a condo personality. Not everyone does, but I do. Down through the years, I’ve written quite a bit about condo ownership, culture and personality. I have very happily been living in a condo for over 20 years; it suits me. I despise gardening, cleaning the pool and worrying about the roof, all of which were part of my previous everyday life. But there is one aspect of condo ownership that frankly I haven’t thought much about until the last few years.

After the collapse of the residential condo building in Surfside, there were developers hovering around older condo buildings, especially those with Florida’s most precious commodity, waterfront locations. The interest in these buildings became more intense after the subsequent passage of a Florida law that requires most condo buildings over 30 years old to undergo structural inspections and correct structural failures. Owners and their boards of directors were approached by developers and started conversations about condominium termination rather than perform expensive repairs many long-time owners couldn’t afford.

Florida condominiums are by definition considered legal entities, just like corporations. They have boards of directors, owners, financial budgets and reserves and creditors. It’s different from single-family homes in that once you become an owner, you become part of this legal entity as just one of its unit owners. And that, of course, is where the condo personality or lack thereof comes in. If you don’t like making decisions by committee, better keep looking for the single-family home.

Condo terminations have been more prevalent in Florida than in other parts of the country because of the large number of aging condo units in South Florida and the lack of developable land near the water. According to the Florida Department of Business and Professional Regulation, over the past decade there have been at least 400 buildings that have undergone condo termination.

So how do you actually achieve a condo termination? All condominiums have bylaws that address condo termination and what the required number of owners must agree to in order to take this action. Some are 80%, some are less, and some are 100%. Realistically, under the best of circumstances, getting 100% of anything is virtually impossible.

In 2007, the state of Florida stepped in and passed legislation that essentially contradicted some condo bylaws by allowing 80% of the condo unit owners to agree to dissolve or terminate the condo regardless of what was written in the original bylaws. The state decided it was to the advantage of current owners who were considering condo termination but were stuck. This was also during the period of foreclosure fraud and the real estate crisis impacting the country. The statute goes on to say that once a developer acquires 80% of the units, it can terminate the condo.

Granted, it appears the law was decided in favor of developers, but individual owners are also benefiting. Some of the buildings being terminated would be staring down the barrel of major special assessments in order to bring the property up to code, making it unaffordable for owners and downgrading the value of their units. Developers state they are offering market value to owners, eliminating structural risks to the building and its owners and enhancing the aesthetics of the area.

Could this happen in Manatee County? Of course it could, but because we have height restrictions in many areas of the county, our waterfront condos may not be as tempting to developers. Nevertheless, all condo owners need to be aware of the change in legislation and the reality that termination of condos is happening in Florida.

In the meantime, my condo personality will help me overcome whatever happens.

Castles in the Sand

Navigating the real estate market

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

I recently read a very extensive and well-researched piece in The Wall Street Journal regarding how foreign buyers are back in the United States to buy real estate and relocate their families. As expected, the majority of these buyers are wealthy individuals who are ready to make a move they may have been thinking about and weren’t able to do during COVID-19 lockdowns in their own countries. Well, they’re here now and buying in Florida and other sunbelt states and, naturally, New York City.

Obviously, if you come across a buyer from another country with a pocket full of cash considering your home, it could be your lucky day. That doesn’t mean you still don’t need to adhere to common sense. No one wants to overpay just because they can.

Everyone knows that cleaning, decluttering and making obvious repairs or paint touch-ups is essential in selling your home, however, that isn’t the most important thing to take care of. The most important decision a seller makes is pricing their property correctly and, in a fluctuating market, it’s not as easy as it sounds.

The old real estate adage that all real estate is local should not be ignored. Since anyone reading this will likely be selling a property on the Island or coastline of Manatee County, what you’re really selling is the Gulf of Mexico. Our region has an abundance of waterfront, water view, water peek, canal front, sailboat water, direct access to the Gulf and I’m sure other descriptive wording I haven’t thought of. Every single one of these “water” possibilities changes the value of your home. Reviewing recently closed properties as close to yours and as recent as possible is a good start. Manatee County’s property website provides access to the public and has every closing available and can be sorted in a variety of ways.

You may have the best waterfront on Anna Maria Island, but if you overprice the property with the assumption that you’ll have plenty of leeway to negotiate, it could be a mistake. You may be missing an entire block of buyers who won’t even look above a certain price point. Pricing a home correctly when it first lists is a much better strategy. Remember there are buyers out there who have been actively looking for just the right thing and have educated themselves in the value of the area. They or their agents are aware of anything new on the market and will know instantly if this property is priced right and worth looking at.

Likewise, pricing a property high because of improvements you have made and perceive to be valuable could be another mistake. What you value is not always what buyers are looking for, especially if the improvements are dark or not neutral or specific to your tastes.

During the pandemic frenzy you could sell just about anything that had four walls and a door. No one cared if your 10-year-old daughter glued almost impossible to get off stars on her bedroom walls or if your husband insisted on a black guest bath, but now they do. According to Zillow, in December 2021, about 44% of homes sold above list price; in December 2022, only 25% sold above list price. Today’s buyers now have a more critical eye and are calculating how much those stars are going to cost to remove.

Whatever market adjustment we’re going through in the country, remember there are always foreign buyers who want to move here. It’s a confidence in our country and our markets we may take for granted, but others don’t. If they have the confidence, certainly we should also.

Castles in the Sand

When old is too old

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

Last week we talked about interest rates and the effect they may be having on the national and local real estate markets. But what if you’re a senior citizen, retired and want to buy another home? There may be barriers to obtaining that loan you never considered.

No secret that lots of real estate is sold to seniors in the state of Florida, and not just Florida. The Consumer Financial Protection Bureau reports that 13% of all mortgages originated in 2021 were by people 65 years of age and older; that is over 1.9 million mortgages.

Nevertheless, older borrowers who no longer draw a paycheck and rely on investments and the interest they generate may have a problem proving to a lender that they have sufficient income and assets to qualify for a mortgage. This is especially true now as housing prices have gone up substantially over the past couple of years.

In addition, widows and widowers could have another problem qualifying if they have lost income after their spouse has passed. Frequently pension benefits are lost or reduced and Social Security benefits will also be reduced. A woman I met told me that after the loss of her husband, she couldn’t afford to stay in her house and didn’t qualify for a home equity loan to help with expenses even though there was adequate equity in the property.

Seniors who are depending on investments to cover living expenses will qualify if they are taking regular distributions from IRA accounts, which are considered income. However, if they are just withdrawing funds as needed, lenders may not consider that as income. Every lender is different, so finding one that has worked with seniors in similar positions is helpful. And of course, keeping your credit score up is essential, so be prudent when considering cosigning a car loan for your grandson.

Last week, we also reported on the sales statistics for Manatee County and the national sales statistics came out right around the same time. The National Association of Realtors said the number of closed sales fell 36.9% from last January; this is in line with our statistics that single-family closings were down by 31.7% in Manatee from last year.

Not similar, however, were the national median existing-home prices, which rose 1.3% in January from a year earlier. Manatee County’s median sale price for single-family homes was up 5.4% compared to last January. This should be expected when you see the selling prices on Island homes and other coastal areas in Manatee County.

Also, according to the National Association of Realtors, seven of the top 10 cities with the largest year-over-year increases are in Florida or the Carolinas. Sarasota is up 19.5%, Naples is up 17.2%, Punta Gorda is up 15.2% and Daytona Beach is up 14.5% – the Florida hot spots. Lawrence Yun, the Chief Economist for the National Association of Realtors, says, “Even with a projected reduction in home sales this year, prices are expected to remain stable in the vast majority of the markets due to extremely limited supply.” I would add that supply is gradually improving with the possibility of it impacting sales values.

If you’re a senior and are experiencing a problem getting financing, remember that it is against the law to discriminate because of age. But it’s not against the law to discriminate because of a lack of income. Use the tools available to get that mortgage done before the prices go up again.

Castles in the Sand

Real estate market warming up

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

It’s winter in Florida and it can be a little chilly in the morning, but, if you pay close attention, you may feel a slight warming breeze. However, the breeze I’m talking about is not in the air, but in the real estate market, and it’s starting to stir demand among buyers.

Mortgage rates have fallen by about a full percentage point for a 30-year fixed-rate loan, signaling that the Federal Reserve may be nearly finished lifting interest rates. As of this writing, the average 30-year fixed-rate loan is averaging about 6.79%, but there are loans out there that are as low as 6.46%, and a 15-year fixed-rate loan is averaging about 6.22%.

The last time we saw mortgage rates in the 6% range was for several years between 2003 and 2008 after which the rates started dropping. Understandably, new buyers to the market were appalled when the rates went over 7% from a low of 3% since they had never seen rates this high.

Redfin reports that the number of people contacting real estate agents to start their buying process has increased from a November low. In addition, real estate contracts rose in December and mortgage applications are up by about a quarter nationally since the end of last year.

The real estate market has always been a barometer of how the economy is doing in general because so much of a successful economy is driven by a successful housing market. Goldman Sachs Group economists said this past month “they expect the worst of the downturn has passed and housing is poised to exert less of a drag on economic growth going forward.”

And buyers are hearing the message and getting accustomed to their monthly housing costs being higher if they plan on buying a home. It’s a correction in their thinking which has finally taken hold.

Let’s see if Manatee County residents are also getting the message. These are the January sales statistics reported by the Realtor Association of Sarasota and Manatee.

Single-family homes closed 31.7% fewer homes than January of last year. The median sale price was $505,710, up 5.4%, and the average sale price was $650,544, up 5.8%. Median time to contract was 32 days, compared to 7 days last year, and the month’s supply of properties is 3.2 months.

Condos closed 24.4% fewer properties than last January. The median sale price was $345,000, up 14.4%, and the average sale price was $392,332, up 3.4%. Median time to contract was 26 days, compared to 6 days last year, and the month’s supply of properties is 3.2 months.

Cash sales continue to drop 31.6% for single-family and 34.6% for condos. However, inventory is increasing and the median and average sale prices are still in positive territory compared to last year. The combination of increased inventory and values that are holding is a great thing. There are regions around the country that would love to be in our position.

In addition, historically, 6% interest rates are not unusual. What was unusual was when they got down to 3%. We as a country have always survived high-interest rates frequently much higher than 6%. Buyers continued to buy even then because owning a home is ultimately the goal of most Americans. So, enjoy the warming trend and be patient it you haven’t felt it yet, it’s coming.

Castles in the Sand

An island in the sun

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

I clearly remember traveling to the Caribbean islands when I was still living in the cold northeast and wondering what it would be like to live and work in such a beautiful place. Do high heel shoes become a thing of the past, to be replaced by flip flops, and do you immediately discard anything that says 100% wool, not to mention pantyhose? I did all of this and never looked back except to be grateful that I found this particular Island when I did.

Don’t misunderstand; I am very pro-real estate and most of the homes on Anna Maria Island are tasteful, new and built to current hurricane building codes, making them safer than their one-level ranch ancestors. Nevertheless, these days if I visit a small island, I can’t help comparing it to Anna Maria Island and can’t even imagine what the next 10 years will bring.

For now, let’s see what the December sales statistics for Manatee County have to say, reported by the Realtor Association of Sarasota and Manatee:

Single-family homes closed 29.7% fewer properties from December of last year. The median selling price was $507,000, up 10.2% from last year, but the average selling price was $610,237, down 0.6% from last year. The median time to contract was 27 days this December compared to six days last December, and the month’s supply of available properties is three months this year compared to 0.6 last year.

Condos closed 24.2% fewer properties from December of last year. The median selling price was $344,475, up 13.7% from last year, but the average selling price was $364,057, down 3.6% from last year. The median time to contract was 19 days compared to six days last year, and the month’s supply of available properties was 2.7 months this December compared to 0.5 last year.

The consensus of opinion is that 2022 has been a change or shift in the market and we are seeing that as well. Dr. Lawrence Yun, chief economist for the National Association of Realtors, indicates that inflation has been dropping and consumers can expect mortgage rates will likely fall as well.

In addition, although there are fewer sales, we have a significant increase in listings, making more properties available. Our market is still, however, considered a seller’s market per the Realtor Association of Sarasota and Manatee.

An island – really just a spit of sand in the Atlantic Ocean – that made all these feelings come roaring back was a one-day stop at a totally undeveloped island called Half Moon Cay, a private island owned by one of the major cruise companies. The actual name for this dot of paradise is Little San Salvador Island 100 miles southeast of Nassau in the Bahamas. Half Moon Cay’s size is close to Anna Maria Island’s, but you would never know it driving around. There are only a handful of homes, a beautiful lagoon, a tourist center with shops and a spectacular unspoiled beach.

That said, based on a recent profile of Anna Maria in the Wall Street Journal, Anna Maria, “a tropical oasis,” is Florida’s second-most expensive zip code (34216) as ranked by median listing price, according to realtor.com. Anna Maria city is topped by Miami’s Fisher Island, pretty good company.

As Anna Maria keeps growing and property values keep going up, I wonder what would happen to lovely Little San Salvador if civilization invaded their beach. Every time I read a profile of Anna Maria in a national publication it leaves me shaking in my flip-flops, but that’s progress and this is an island in the sun.

Castles in the Sand

Fear is in the air

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

Welcome to a new real estate year. Unfortunately, the new year looks a lot like the old year.

With interest rates and inventory levels fluctuating, a general feeling of confusion is spreading among both buyers and sellers – you might even call it fear.

The November Manatee County sales statistics are below average and confirm what most of us know – that sales are down and prices have also been trending down in recent months. However, the Realtor Association of Sarasota and Manatee stated, “median sale prices continue to show year-over-year increases, while other factors point towards more typical market conditions.” In other words, selling prices are up compared to last year and more properties are available for sale which indicates a more normal market.

By the way, these numbers came out on Dec. 21, the day I was boarding a ship in Fort Lauderdale for a holiday cruise. Therefore, I apologize for the late reporting.

Nevertheless, the numbers don’t lie, but they do tell us that Florida in general is still in one of the better real estate sales positions in the country. In fact, per Redfin.com, an online brokerage, reports that out of the top 10 relocation choices, the state of Florida has captured five of them. They are #3 Miami; #5 Tampa; #7 Cape Coral; #8 North Port-Sarasota and #10 Orlando. The other five are in Sacramento, Las Vegas, San Diego, Phoenix and Dallas, in that order.

So where is everyone relocating from? It’s likely you’ll find familiar names in this list, as all big American cities are all bleeding population. The number one city people are leaving is San Francisco and they go down in this order: Los Angeles, New York, Washington, D.C., Boston, Chicago, Detroit, Denver, Seattle and Philadelphia.

Redfin says that nearly 25% of the properties searched on their site are from cities where the person doesn’t currently live. This is up roughly 10% from 5 years ago.

Let’s see what happened in Manatee County for the month of November reported by the Realtor Association of Sarasota and Manatee.

Single-family homes closed 35.6% fewer properties compared to last year. The median selling price was $506,655, up 12.5% from last year, and the average selling price was $636,674, up 7.3% from last year. Median time to contract was 29 days, compared to 6 days last year, and active listings are way up at 246.2%, translating into a 3 months’ supply of properties.

Condos closed 36.4% fewer properties compared to last year. The median selling price was $358,108, up 19.4% compared to last year, and the average selling price was $391,320, up 14.3% from last year. Median time to contract was 18 days, compared to 9 days last year, and active listings were also way up at 266.7%, translating into a 2.7 months’ supply of properties.

Interestingly, cash transactions are down from last year for both single-family by 45.6% and condos by 23.2%. Likely a reflection of the economy in general.

Predictions for the new year are all over the place. Part of the reason no one can figure it out is the speed of last year’s mortgage rate increases gave everyone whiplash. And the Federal Reserve chairman has virtually promised more to come during his December speech raising the prime rate by 0.5%. The sad thing is most prospective buyers can still qualify for loans even at the higher rates but are afraid to buy in such an unpredictable market.

Real estate is still a good investment and Florida is one of the best markets in the country. So, don’t let fear rule you in the new year, do your due diligence and make informed decisions. Welcome to 2023.

Castles in the Sand

Building for rent, not sale

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

The American dream of single-family home ownership, according to certain builders and financial wizards who are paid to know these things, is on the decline. Well, maybe not a decline but certainly a shake-up in the way single-family home living is viewed.

If you haven’t heard of SFRs, which is short for single-family home rentals, don’t feel uninformed since I too just stumbled on it myself. Apparently, while almost everyone was consumed by the escalating single-family home market, the SFR snuck in and is now a hot area in the real estate market. So hot, in fact, that entire communities are being built by enterprising builders comprised of all single-family homes strictly for rent.

The National Association of Home Builders indicate that the $4.4 trillion SFR market is one of the fastest-growing sectors in real estate. They go on to say that single-family built-for-rent homes account for 11% of all single-family home construction in the housing market. This market share is way more than the 3% that was typical over the last several decades.

The demand for single-family rental homes fills a gap on several different levels. With interest rates going up and the price of homes going up, buyers are having a much more difficult time finding a home. So here comes brand new single-family home communities of smart homes with amenities and upgraded fixtures without any of the home ownership hassle. This has a lot of appeal to remote workers who may be transitory and may be more interested in holding on to their cash while still living in a home. Not to mention seniors who have sold their larger properties to cash in on their equity and don’t want to make another financial commitment.

This trend is happening even though rents on single-family homes have risen 10.2% year-over-year through September 2022 due to inflation, per CoreLogic’s single-family rent index. The most recent information is that the median rental cost for a three-bedroom, single-family, detached home is $1,900 per month nationally. Compare this to mortgage payments on a comparable home that have increased 50% since the beginning of the year. Buyers are doing the math and have determined that renting is a lot more cost-effective than owning in today’s market with interest rates double what they were two years ago.

There are a handful of companies around the country that are constructing built-for-rent communities and quite a bit of information is available on the internet about these companies and their homes. In Florida, I did find a few built-to-rent communities in Palmetto, Plant City and Wesley Chapel near Tampa, but so far Florida has not caught the built-to-rent bug on a grand scale.

We all know the benefits of owning your own home – building equity, pride of ownership, freedom to do what you want with your property and the consistency of neighborhoods not always guaranteed in rental communities. However, despite this, buyers are sitting out buying and waiting for what they think will be a single-family correction to the market. Investing their down payment money in high-interest savings accounts and waiting to see if the dust settles on the housing market has become a real development.

Real estate is always dynamic and hard to predict. Every buyer’s family and financial situation is unique so if SFRs works for you this might be the time to dive in. However, you may think interest rates are high, but historically under 7%, where they are now, is a good rate so if that’s the only thing stopping you from buying, think about it. Happy New Year!

Castles in the Sand

Do you need a mortgage button?

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

The tradition of a mortgage button is a little scrimshaw button mounted atop a stairway’s newel post, as a symbol the mortgage was paid off. This is something I saw for the first time on Nantucket Island where my uncle and his wife retired many years ago. Ever since then, I’ve been fascinated with the concept of a mortgage button. Now, however, paying off your mortgage may not be as impressive as in times gone by for every homeowner.

In today’s world, there are many forms of retirement, or not retiring at all. Because of Zoom, inflation and interest rates, many individuals who would have retired even 10 years ago are postponing retiring. If your choice is to retire, are you planning to pay off your home’s mortgage with other assets or will you keep your mortgage in place? Retiring with your home “free and clear” was a goal of previous generations and many homeowners still strive for this, but financial managers may want to have a further discussion about the real benefits.

Even if you decide to give up work or work part-time, many have calculated that carrying a mortgage is a better choice. This is especially true if you have a low-rate mortgage because of either owning your home only a few years or, like many people, having refinanced your existing mortgage when rates were ultra-low. According to the Federal Reserve, nearly 58% of those ages 65-74 had mortgages or home-equity lines of credit on a primary residence in 2019. This is up 22% from 1989 based on available statistics.

Even if you can afford to pay off your mortgage before retiring, does it make sense to deplete your cash or investments for this use? A financial advisor will look at all of your income and assets and make a recommendation designed specifically for you, including safe, low-risk investments.

In addition, your tax consultant needs to be in the loop since tax ramifications must be considered. Although the 2017 tax overhaul significantly raised the standard deduction, there are still homeowners who will benefit from a home mortgage interest deduction.

Finally, keeping a low-rate mortgage frees up equity that you otherwise would not have access to. After retirement or switching to part-time work, your family income is obviously reduced, which would make it difficult to qualify for a new mort-

gage or home equity loan should you need it for a health emergency or other reason. Or just having the money available for a new car, dream vacation or to help out a family member may be enough of a reason not to pay off your mortgage.

Paying off your mortgage and retiring with no debt certainly gives you peace of mind, and that’s something to be proud of and a reason to get a mortgage button. The mortgage button can also be called a brag button indicating there is no lien on the property. Part of the mortgage button’s myth or fact is also another little-known aspect that the mortgage, when paid off, is stored in the newel post at the base of the home’s stairway before the mortgage button is installed.

Historians have debated the truth about the mortgage button for over a century. As for me, it’s a great story, true or not, and a special memory from my first trip to a magical island. Happy holidays!

Castles in the Sand

Are there any houses without flaws?

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

“A mark, fault or other imperfection that mars a substance or object.” That, my friends, is the definition of a flaw. If you think you can find a house that doesn’t fit this description, you’re probably dreaming.

Every home built or lived in has flaws; it’s up to the buyer and seller to decide
if the flaw is serious enough to repair or serious enough to not buy the home. Here are some things to think about on both sides of the transaction.

Buyers need to be aware of many things when first viewing a home. If you have young children, or are just sensitive to noise, be aware of traffic or boat noise at various times of the day. Sometimes homes on main roads are priced better but may not work for your family.

Naturally, obvious structural issues like sloping floors or cracks in the walls should raise a red flag.

Water is a problem if leaks get out of control in a home. Question water stains, mold, peeling paint or blisters on the paint and an overall musty odor. Look under sinks for water dripping and run faucets to see if they leak.

Check to see if the floors are maintained. Scratches on hardwood, cracks on tile and worn carpeting could be an indication of an overall maintenance issue in the home.

Look carefully at the appliances and see if they’re rusty or have dents and look worn out. It’s perfectly legitimate to ask if the appliances are in working order and ask their age. Any hanging wires or broken fixtures could indicate a worse electrical problem and should be questioned.

Finally, landscaping and the entire exterior of the home will give you an im- mediate negative or positive impression the minute you step out of the car. First impressions do count.

If you’re selling, sometimes rather than take on a major renovation of a kitchen
or bathroom it’s just as productive to use a little elbow grease. Even though there is still a shortage of inventory in most markets, buyers are frequently turned off by little things. Any type of odor, whether it’s musty, pet, gym shorts or baby, needs to be corrected. When you’re putting your house up for sale, the best favor you can do it is investing in a deep cleaning. The second-best thing you can do is enhance your curb appeal. Remove the bikes, toys and half-dead plants. Paint peeling on outdoor trim and dirty windows are a no-no.

If your home needs more than a good clean-up, fresh paint may not be as dramatic as a new bathroom, but it will do that first impression a lot of good. Refinishing hardwood floors or putting down an inexpensive piece of carpeting in the kids’ rooms will more than pay for itself. Other small fixes that buyers love are new doors and custom closets, many of which you can do yourself. Think about what appeals to you when you look at Realtor pictures of homes for sale. It could be as simple as new throw pillows and bed quilts. I once bought a $300 new sofa for my family room after my dog made the old one his home. It worked perfectly. The buyers even wanted to buy it from us.

Homes aren’t the only things that have flaws. Most of us can look in the mirror and see a long list of things that need fixing. Just remember, there are no perfect homes and no perfect people. A good lesson to keep in mind.

Castles in the Sand

Let’s talk turkey

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

So, after the turkey is consumed, the pies are half gone and the dishwasher is running its first load, it’s time to talk turkey. And what’s everyone’s favorite dinner conversation – real estate.

Let’s start with one of the mysteries of the ages, why mortgage rates go up and down. If you think you’re going to get an understandable answer from me, guess again. Some mysteries are never solved.

As of this writing, the average rates are 6.89% for a 30-year, fixed-rate mortgage and 6.26% for a 15-year, fixed-rate mortgage. Adjustable-rate mortgages are 5.52%, not too much better but could put borderline buyers in the range of qualifying. These rates have actually ticked down a little from 7% a few weeks ago in spite of the Federal Reserve upping their rate by 0.75% again.

Nationally, home sales typically go down when rates go up since fewer potential homeowners qualify for a loan. Despite the sharp decline in sales, home prices are rising on a year-over-year basis, in part be- cause supply remains low. Unfortunately, a slower housing demand affects other goods and services. Furniture, appliances, lumber and plumbing sales declined in September due to less demand for those products, slowing down the overall economy.

Not surprising, the future predictions are all over the place. The Mortgage Bank-
ers Association thinks mortgage rates are expected to end 2022 at 4.8% and to decline gradually to 4.6% by 2024. Good news, if you believe it, for buyers who are trying to decide between an adjustable-rate mortgage and a conventional one.

The National Association of Realtors kind of agrees with the above, saying that all in all, the 30-year, fixed-rate mortgage is likely to hit 5.3% by the end of the year, and that 5-year adjustable-rate mortgages will be at 4% by the end of the year.

Finally, a senior economist at Zillow says that competing dynamics suggest that there will be little reason for mortgage rates to decline anytime soon.

As far as pricing is concerned, the National Association of Realtors expects prices to post year-over-year declines starting next year.

Let’s just see what the Manatee County market did for the month of October according to the Realtor Association of Sarasota and Manatee.

Single-family homes closed at 22.5% less than last October. The median price was $549,444, up 29.3% from last year and the average price was $711,358, up 25.8% from last year. Median time to contract was 24 days compared to 6 days last October and the month’s supply of properties was 2.8 months versus 0.8 last year.

Condos closed 22.5% less than last October. The median price was $368,700, up 32.6%, and the average price was $388,103, up 17.4%. Median time to contract was
22 days versus 7 days last year and the month’s supply of properties was 2.3 months compared to 0.6 last year.

The trend of fewer sales and raising inventory is continuing. Some real estate analysts feel the market is leveling off with less of a bounce to higher values. A lot of this as it relates to Florida is impacted by hurricanes, interest rates and inflation. And we’re not alone. Just coming over one of my news feeds is a report that home sales nationally fell for a ninth straight month in October, according to the National Association of Realtors.

I hope this gives you some debatable information to discuss at the Thanksgiving dinner table. Just remember that when it comes to talking turkey, you probably know as much as anyone. Happy Thanksgiving.

Castles in the Sand

Zoom towns

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

They call them “Zoom towns” because so many of the new residents are working remotely and have given up their city and suburban lifestyles for a more relaxed environment in smaller communities. It’s no secret that this massive lifestyle change evolved because of COVID-19, but even now, when the danger of serious infection is substantially reduced, Zoom towns are still popular.

A recent National Association of Realtors survey reported that buyers who purchased homes in the year that ended in June moved a median of 50 miles from their previous residences. This is the highest distance on record, going back to 2005 when the median was a consistent 15 miles. This may not seem like a lot of mileage difference, but 15 miles from Boston, for instance, is still part of the city, but when you go 50 miles, you’re in real country. In New York City and other large metropolitan areas, however, you would need to go a little further than 50 miles to really be getting away from it all.

In the same survey, smaller communities were more popular, with buyers purchasing 48% of the homes. Again, this is a record and is up from 32% a year earlier. By comparison, traditional suburban home purchases dropped to 39% from 51% the previous year and only 10% of home purchases were in urban areas, down from 13% the year before. Naturally, the increased cost of homes and now the increased cost of financing has certainly influenced buyers.

Home buyers who are getting close to retirement are another influence on the popularity of small communities. Many who have the ability to work remotely chose to relocate now rather than after their retirement date. This gave them an edge before mortgage rates and prices went up further and set them up for easing into retirement.

Confirming further the demand for homes in smaller communities, The Wall Street Journal/Realtor.com Emerging Housing Markets Indexes came out at the end of October. It reports that the demand for homes in low-cost cities with strong local economies is, in their opinion, “robust.” This annual survey incorporates economic and lifestyle data, including real estate taxes, home appreciation, unemployment, wages and commute time in their 300 biggest metro area rankings.

This survey places the North Port, Sarasota and Bradenton region at number four in the top 10. Unfortunately, as we all know, North Port has taken a big hit from Hurricane Ian since this survey was completed, so in next year’s survey it will be interesting to see where that area is placed.

The other Emerging Housing Markets were in this order: Johnson City, Tennessee; Visalia-Porterville, California; Elkhart-Goshen, Indiana; Fort Wayne, Indiana; Lafayette-West Lafayette, Indiana; Columbia, South Carolina; Columbia, Missouri; Raleigh, North Carolina; and Yuma, Arizona.

Danielle Hale, chief economist at Realtor.com, said, “These more affordable markets continue to offer some opportunity. It doesn’t mean that they’re not seeing a slowdown in their housing markets, but they’re better positioned generally.” In other words, they had faster home sales and lower unemployment rates than the market as a whole, which is attracting buyers in an otherwise difficult housing market. Further, according to an economist at Nationwide Insurance, the trend toward less expensive housing markets looks like it will continue even if home prices start trending down.

I guess all of Florida needs to be considered a Zoom town based on the number of people who have relocated to our state in the past two years. We’re still a state with a lot of smaller, cozy communities, access to waterfront amenities and a friendly business environment. I believe our new diverse residents will only enhance those attributes. Time to pack your laptops and zoom your way to the Sunshine State!

Castles in the Sand

Mortgage rates scary

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

“Boo!” all you ghosts and goblins. If you’re afraid of what’s lurking behind those Halloween masks, I’ll give you something to really be scared of – the 30-year fixed rate mortgage rate has cracked 7%. I bet I have your attention now.

According to Realtor.com, as higher mortgage rates have thinned out the competition for homes, properties are now sitting on the market longer. That has led to a 26.9% national increase in inventory in September. However, that doesn’t mean buyers will have an easier time finding a property.

The housing shortage, which caused home prices to spike, isn’t even close to being filled. The nation still has 42.6% fewer homes for sale than in 2019 and it doesn’t look like the situation will get much better anytime soon. Even builders are spooked during the month of Halloween and are slowing down construction.

However, not much of this applies to Florida where real estate prices are holding their own. The state emerged as a housing hot spot during the pandemic, attracting retirees, remote workers, as well as those looking to leave more expensive parts of the country. Home prices in Miami increased the most among the nation’s 50 largest metropolitan areas in September, jumping 28.3% year over year. Home prices also were up 18.2% in Orlando and 17.2% in Tampa.

Time to see what Manatee County’s sales statistics are for the month of September as recorded by the Realtor Association of Sarasota and Manatee:

Single-family closed sales are down 37.5% from last September. The median sale price is $517,193, up 20.3% from last year, and the average sale price is $624,142, up 7.6% from last year. The median time to sale is 62 days. Last year it was 48 days. The month’s supply of inventory is 2.7 months.

Condos closed 35.9% fewer properties when compared to last year. The median sale price was $337,000, up 18.2%, and the average sale price was $401,183, up 24.7%. The median time to sale was 57 days compared to 41 last year, and the month’s supply of inventory is 1.9 months.

The trend of fewer sales is continuing, and prices are leveling off somewhat every month. However, prices continue to be strong compared to last year and inventory has not significantly increased. We’re still in a sellers’ market, although it appears that everyone is having a wait-and-see attitude regarding the economy.

Gone are the days of bidding wars and multiple offers on a property as soon as it comes on the market. Realtor.com reported that nationally 19.5% of sellers cut the price of their home in September. As previously stated, some buyers can no longer qualify for loans and others have thrown up their hands and given up or are switching to adjustable-rate mortgages.

As of Oct. 20, the average 30-year fixed rate mortgage was 7.25% per Forbes, the average 15-year fixed rate mortgage was 6.47% and the average 5/1 ARM was 5.42%. A 5/1ARM means the rate is fixed for 5 years and then can adjust each year after that. With a lower rate offered for an ARM, buyers have a better chance of qualifying for a loan but have to worry about the rate readjusting in 5 years to one they may not be able to afford. There are no good choices for the average buyer.

Hoping you have a fun Halloween in spite of soaring interest rates. Relax, some things you can’t control, so drink the witches’ brew and steal the kids’ candy. I guarantee you’ll feel better.

Castles in the Sand

Credit scores can spoil deals

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

You finally found the house, negotiated a price and the contract is signed. What can go wrong from this point? Plenty.

You may have read about a little glitch involving credit scores back in August. At that time, it was reported that Equifax, one of the three agencies that monitor credit scores, reported inaccurate credit scores for millions of would-be borrowers over a three-week period from March 17 to April 6. The problem was reported to lenders in May.

Equifax reported that some people who may have been applying for mortgages, auto loans and credit cards may have had their scores lowered or increased by 20 points or more. A 20-point error in a credit score could easily lead to mortgage applications being rejected. This is one of those unfortunate errors that affect borrowers who may have done their homework prior to making an offer on a home and who are sure what their credit score is and their ability to go forward with a real estate transaction.

Mortgage lenders typically pull credit reports from all three agencies: Experian, TransUnion and Equifax. The lenders take a look at all three scores and from there create a combined score, according to the executive chairman of Inside Mortgage Finance. This is when the lender is able to determine whether or not to approve the mortgage application and what interest rate to offer. Since only Equifax was affected, the impact may not have resulted in a lot of people being turned down for mortgages. However, it could have influenced the interest rate offered on a loan, resulting in higher mortgage payments.

If you think a recent loan may have been affected by this error in credit score reporting, the first thing is to contact the lender. They need to review the application process and determine if an Equifax credit score was used in the underwriting process and if the Equifax score was lower than the others used. From there, your lender will determine what exactly this means to the outcome of your loan.

This is a great lesson for anyone planning on applying for a loan in the coming months. It would be beneficial to set up alerts with each of the three credit reporting companies, so you know quickly if there is something unusual on your credit report. Ultimately it is your responsibility to pull credit reports on a regular basis and go over them with a fine point, looking for postings that do not apply to you. You always have the ability to challenge anything that looks like an error.

Equifax’s position is that there was no shift in the vast majority of scores during the three-week time frame. For those consumers who did experience a score shift, their initial analysis indicates that only a small number of them may have received a different credit decision. If you feel you need to make a correction on a credit report or score, contact the Consumer Financial Protection Bureau, which can provide you with a list of instructions and a sample letter that will assist you in filing a claim.

I can’t say enough times that the process of purchasing a home, frequently the biggest investment of a lifetime, has a lot of moving parts. It is up to you as the borrower to
be proactive every step along the way. As we’ve seen too many times, large financial institutions make mistakes, so keep checking your credit reports and scores, especially if you’re looking for a home.

It’s not over ‘til it’s over, and heaps can go wrong before it is.