Tag: Manatee County real estate

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

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

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

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

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

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

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

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

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

More Castles in the Sand:

Selling your home – it should show like a model

Sunshine State population growth

2019 tax nightmare

Every year around this time I try and remind homeowners what potential buyers are looking for. Even though our market remains brisk, we are on the brink of the busy selling season, which will get in full swing as more and more visitors return to the Island with an eye to purchasing their paradise home.

Let’s start with the old chestnuts of getting your house ready for sale. Since cleanliness is next to you-know-what, every inch of your house needs to be spotless. On an island where there are more sand and salt than the average Northerner sees in a lifetime, it’s always a challenge to get it out of our homes and off our windows. But out it must go; not a speck of sand on the floors and not a grain of salt on any of the glass.

Island living also means that mold grows on any damp surface faster than McDonald’s cranks out Big Macs. Scrutinize every inch of bathrooms, kitchens, grout and outdoor furniture looking for mold or the beginning of mold. Remember mold and dampness smell. You don’t want your home smelling like a high school locker room.

Clear off countertops in the kitchen and bathrooms, especially if you have really nice hard surface ones. Organize and declutter closets, the kid’s toys and the laundry room. If you’re lucky enough to have a garage, clean it out to make room for an actual vehicle, not just bikes, lawnmowers and old paint cans.

You also might consider storing away any collectibles you may have on display, including family photos that could become a distraction to buyers touring your home. The object is to make everything look larger than it might really be and keeping the buyer’s eye on the ball, not your daughter’s wedding.

Make sure all systems like heat and air conditioning and appliances are in working order and there is no peeling paint. When buyers pull up to your home, they want a reason to get out of the car, so give them one. Make sure there’s nice landscaping, the weeds are pulled and walkways cleared. How about another old chestnut, painting the front door a jazzy color. They say red is good luck.

You can’t totally remake your property before sale, but you can keep it as neutral as possible.

A little paint goes a long way, so consider painting some of the walls where needed in a light gray color, which is very much in vogue right now. Even removing some heavy dark furniture will give a feeling of more space, as well as a lighter, more open impression.

You may not be able to create high ceilings overnight, but you can make sure the ceilings don’t have any cobwebs dangling from them. And in a hurricane-prone area like ours, owning a generator that can be passed on to a new owner could be just the right touch.

Finally, anything just a little off about your property could raise a red flag to buyers who may already be guarded during their house hunting experience. Don’t make them think that you’re not a responsible homeowner because you missed something as minor as a cracked bathroom tile or broken doorknob.

If you’re putting your property on the market this season, good luck. Everything is pointing to the Island being busy and the real estate market being equally busy. Let the sun shine through those windows.

More Castles in the Sand:

Sunshine State population growth

2019 tax nightmare

Is a piece better than the whole pie?