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Castles in the Sand

April real estate fools

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

Well here we are; it’s April 1st, April Fools’ Day, and most of us are camping out in our homes while some of the best spring weather is outside our doors. Fortunately, this is Florida and you can still ride your bike, take a walk or run your boat even if the beach is closed.

We, of course, have no idea when this is going to end and what effect it will have on the economy as a whole and specifically real estate values. We can assume there will be a serious impact which is really ironic in the face of the February Manatee County sales numbers, which are spectacular. So let’s start with those numbers as reported by the Realtor Association of Sarasota & Manatee.

The number of single-family homes closed 2.8% with the median selling price up 8.9% to $325,000 and the average sale price up 4.8% to $407,940 from February last year. The median time to sale was 90 days, down 7.2% and the month’s supply of properties was only 3.4 months, down 24.4%.

Condos closed 40.1% more properties in February compared to last year. The median sale price was $210,000 up 11.1% and the average sale price was $245,303 up 7.7%. Time to sale was 39 days, down 42.6% from last February, which was 68 days. And the month’s supply of properties was 4.5 months, down 10%. An interesting side note was the number of cash buyers which was up 22.4% for single-family homes and 15.7% for condos.

It almost doesn’t need to be said that March’s numbers won’t be anywhere near February’s; if they were, believe me, no one would be happier. There are some modifications the government and the Florida Realtors’ Association are making to help homeowners and buyers and sellers.

Fannie Mae and Freddie Mac are suspending foreclosures and evictions of homeowners behind on their mortgages and at risk of losing their homes. The 60-day suspension affects about 182,000 homeowners who are in different stages of foreclosure. The Federal Housing Administration (FHA) is also suspending foreclosure actions for 60 days. In addition, borrowers affected by the coronavirus outbreak could reach out to their mortgage servicer for help in suspending payments for a period of time.

Finally, the Florida Realtors’ Association has released a new contract extension addendum that allows for time periods and dates to be extended as a result of the pandemic in the event the parties to the contract would like to extend the terms of the contract. Delays could be caused by travel restrictions, self-imposed and/or governmental required isolations, closure of offices that fund and close transactions as well as inactions of homeowners’ and condominium associations.

Some of the extension options are closing date, financing period, inspection period, title cure period, feasibility study period, due diligence period, homeowners’/condominium association approval and a provision for a loan-approved buyer should things change on the lenders’ side as a result of the pandemic.

I hope everyone is adhering to the coronavirus guidelines and not gathering in groups, staying home if you’re sick or older with underlying health issues and washing your hands on a regular basis. My personal best wishes to everyone to stay safe and healthy and be patient until our lives get back to normal.

Castles in the Sand

Million-dollar homes and curb appeal

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

Three months pass by really quickly. Just think about where you were three months ago mid-December; wrapping Christmas gifts, planning a New Year’s Eve party, getting your heating system checked for the cooler weather ahead and possibly organizing your winter guest calendar.

The one thing for sure you weren’t doing is getting worried about something called the coronavirus, canceling vacations and stocking up on non-perishables as if it were hurricane season. But here we are and you either roll with it or, well there is nothing else to do except roll with it.

The one thing that appears to be consistent, however, is our real estate market, so in a few more paragraphs we’re going to see just what the million-dollar and over marketplace looks like. First let’s consider a few tips on how to make your house stand out from the others, whether they’re $1 million or not.

There’s a whole theory about curb appeal that most real estate professionals learn from experience. Most professionals will tell you to make your home as appealing as possible so that potential buyers will want to get out of the car and step inside. You would be surprised by the number of buyers who refuse to even take this simple step when looking at a home; usually it’s a big mistake that buyers may come to regret.

What you want to do is to never give the buyer a reason not to get out of the car. Start with the front lawn, the most basic of basics is to mow the lawn, trim the bushes, pick up the trash and the kids’ toys and paint peeling trim. Now if you’re able to get a buyer that far, consider painting the front door a special color. We live on an island, so many of our doors are tropical and fruity, but how about a red door, which means welcome in America and protects from evil spirits in China. Also, if there is any way to get your neighbors next door or across the canal to tidy up, you will be doing not only you but them a big favor.

Everyone knows that curb appeal has value, but it wasn’t till recently that we knew how much value. In a recent study in the Journal of Real Estate Finance and Economics, researchers have started analyzing that very thing. These researchers compared Google Street View photos to sales data and have determined that homes with good curb appeal sold for 7% more than similar homes. They’re also expanding this research with the hope of providing information to banks and Fannie Mae in determining value for home financing.

Well, back to the $1 million and over analysis for the months of November, December and January in the three cities on Anna Maria Island and in Cortez. The closed sales are from the Manatee County Property Appraiser’s office website and the available properties are from realtor.com at the time of this writing.

Cortez did not have any $1 million or over sales, same as last time. The City of Anna Maria had 16 ranging from $2,550,000 to $1,000,000, double from the last reporting period. The combined cities of Holmes Beach and Bradenton Beach closed 24 $1 million or over properties ranging from $5,850,000 to $1,000,000 – way more than the eight closed during the previous three months.

On the market as of this writing there are four in Cortez ranging from $1,600,000 to $1,200,000; last time there were two. The City of Anna Maria has 63 properties $1 million or over listed. The range is from $6,850,000 to $1,045,000. Out of these 11 were $3 million or more; in the last analysis, there were 59.

Finally, in the combined cities of Holmes Beach and Bradenton Beach there are 93 properties listed over $1 million, 12 between $7,995,000 and $3,100,000 and 60 between $2,995,000 and $1,044,500; last time there were 73.

I hope the next three months don’t have too many surprises and that we all stay healthy enough to prepare for hurricane season. Oh, think about that front door.

Castles in the Sand

Real estate in the time of coronavirus

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

Last week I wrote about a seller’s market, which we are in at this moment in time. I cautioned about sellers not getting too smug about the value of their property, and how markets can turn on a dime. Since real estate markets lag well behind stock prices, we don’t know yet what effect the coronavirus will have on buyers’ commitment to moving forward, but if the stock market is any indicator, turning on a dime may have been an understatement.

If your home is on the market and you need to sell, you’re in a totally different place than you were a few months ago. No one knows exactly how the coronavirus will impact business, manufacturing, tourism and housing. It doesn’t take much for buyers to get spooked during a crisis and put everything on hold until the immediate danger is over, and things return to normal. Since we haven’t experienced a world-wide epidemic as vast as this one in most of our lifetimes, we have no idea how people will react. But here is some of what the experts are focusing on.

To me, the most interesting fallout of this epidemic and something that affects all homeowners or potential homeowners is the influence on interest rates. If you’ve been watching the stock market, you’re seeing a sell-off of stocks, driving investors to park their money in safer assets like U.S. Treasury bonds. Typically, when bonds are strong, mortgage rates fall. As of this writing, the average 30-year, fixed-rate mortgage was 3.34%, and the Federal Reserve has already cut rates and will consider further action if necessary.

This should be a perfect buying storm for buyers, but it’s not that perfect. As stated continually, there is a shortage of inventory all over the country and particularly in Florida, with the result of increased selling prices. Couple that with a big unknown in everyone’s life and the wheels of business could easily grind to a halt. Non-essential purchases like boats, RVs, renovations and second home purchases will surely feel the pain if this virus isn’t contained soon.

Secondly, we have a lot of foreign buyers in this country, many of them wealthy Chinese who are buying luxury properties in big northeastern cities and in Florida. The National Association of Realtors’ chief economist Lawrence Yun said the outbreak may make it more difficult for Chinese buyers to pick up U.S. properties for now, but it could be a boom for the market long term. The Chinese real estate market has plummeted 90% since the virus’ outbreak, and when the dust settles, Chinese buyers may more than ever be looking for diversification and a secure place to invest their money for the long term.

As I write this, the stock market is down another 800 points and more than 100,000 people around the globe have been infected by the coronavirus. You have to assume that most buyers and sellers are putting everything on hold waiting for this to end; you can’t look at real estate if you’re worried about being quarantined, as remote as that may sound right now.

I’m positive I will, unfortunately, be writing more about the coronavirus’ effect on the real estate market before we’re done with it. In the meantime, stay calm, wash your hands, renew your Netflix account and try not to look at your financial statement.

Jason Sato tops county real estate rankings again

Jason Sato tops county real estate rankings again

Written by Joe Hendricks on . Posted in Business, Real estate | Development.

ANNA MARIA – For the fifth consecutive year, Sato Real Estate’s Jason Sato was the top real estate agent in Manatee County in 2019 in combined total sales and listing volume.

Duncan Real Estate owner and broker Darcie Duncan was again the Island’s second-highest seller and she ranked fourth in total volume countywide. AMI Beaches Real Estate agent Gregg Bayer ranked ninth.

The rankings are according to the 2019 Agent Market Share Report for Manatee County.

Sato made 30 sales and had 42 listings for a total volume of $81.5 million. Duncan made 23 sales and had 38 listings for a total volume of $40 million. Bayer made 17 sales and had 18 listings for a total volume of $35 million.

AMI Beaches Real Estate agent Gregg Bayer did more than $35 million in sales and listings in 2019. – Submitted | AMI Beaches Real Estate

Two agents in the top 20 made more than 50 sales and two others had all listings and no sales.

Sato’s streak

“It’s been five years in a row. It’s a lot of hard work and a lot of time put into it,” Sato said. “I grew up on the Island, I live on the Island and people see that I’m active in the community. I don’t stretch myself thin. I focus all my attention on Anna Maria Island and I want to thank my loyal customers.”

Sato said his sales assistant, Grace Wenzel, and office manager, Monica Reid, contribute significantly to his success.

“They’re very helpful setting appointments and getting the paperwork organized. I’ve got a good team behind me. My customers love Grace and she helps me stay organized.”

Sato was asked how 2019 compared to 2018.

“I was up by about $7 million, but for the most part, it was about the same. Hopefully, we can keep it rolling,” he said.

“If you’re doing $30-35 million a year, you’re doing really well,” he said of his peers.

When asked about market trends, Sato said, “People like the newer stuff. Builders are building nicer spec homes and people seem to like those. The market seems pretty solid. Inventory’s good and interest rates are low. A lot of people are buying second homes and more people are buying for themselves rather than for renting. It’s about half and half. It used to lean way more toward the rental side. People still love the Island. People want to be a part of the Island and I think that’s our biggest selling feature. People love that ‘old Florida island’ feel that we still have.”

Proud mom

Sato co-owns Sato Real Estate with his mom and fellow Realtor, Barbara Sato.

“Five years in a row. Nobody’s done that before,” Barbara Sato said. “I’m super proud of him and I believe he gets there by being honest and hardworking. He was raised here, he lives here, he loves the Island and he knows the Island like the back of his hand. The whole office is so proud of him. He’s very deserving.”

Duncan delivers

When asked about her annual appearance near the top of the rankings, Duncan said, “I attribute it to hard work, good client relationships and being in this business for 30 years. I get up every day, work hard and do the best I can to bring my customers the best service I possibly can. And I love what I do.”

Darcie Duncan was once again second on the Island in sales and total volume. – Submitted | Duncan Real Estate

Regarding market trends, Duncan said, “Prices have stabilized and there’s a lot of interest. I see the market being strong this year and you have never seen interest rates as low as what you’re seeing right now. Out here, we’re seeing rates in the low 3% range. You get a lot of house for your money right now with interest rates so low.”

“A lot of people want to buy here and it’s not as rental driven as it was in the year prior. People are looking to retire here. The inventory levels are stable and there’s a lot of different price points, so there’s something for everyone,” Duncan said, noting she has a nice mixture of on-Island and off-Island clients.

When asked about the Island’s older, traditional, ground-level homes, Duncan said, “We’re seeing more people buy them for permanent residences.”

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Castles in the Sand

Let’s all just take a breath

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

How would you feel lounging on your deck overlooking the shining waters of the Gulf of Mexico and reading this headline: “As seas rise, your coastal home in Florida could lose value by 15% by 2030?” In mid-January, that’s just what the Miami Herald had in their paper and it only got worse when you read the copy.

The Herald outlined two new reports that calculated how much of an impact climate change will have on Florida’s real estate. One report from the international consulting giant McKinsey Global predicted that Florida homes subject to the risk of flooding could lose 5-15% of their value in the next decade, and by 2050 that could increase to 15-35%. The second report from the Miami-Dade-focused report from Jupiter Intelligence said their researchers found that moderate flooding of about one foot will affect nearly double the number of homes by 2050.

Both reports are talking about a relatively new topic in the financial world called “climate risk” and it explains all the ways that the warming world will influence the global financial systems. Florida, particularly south Florida, appears to be the guinea pig for the rest of the country’s coastal communities.

Essentially, the major issues are insurance, mortgages and potential buyers. Anyone who lives within spitting distance of the water lives with insurance anxiety a good part of the time. These studies contend that as climate change affects rising sea levels and consequently flooding, insurance premiums will go up as will premiums for hurricane coverage and windstorm insurance. The National Flood Insurance Program, which has been the topic of a lot of speculation during the past several years, is redesigning its rates to better reflect risk next year. Currently, Florida represents 35% of all policies held by The National Flood Insurance Program.

Mortgages may be more expensive to get once banks realize that a home facing the prospect of going underwater isn’t a sound investment, or totally decline to issue mortgages on these properties. And finally, will these studies and subsequent reporting scare buyers away from purchasing in coastal communities? It’s not a stretch to assume that local budgets could be affected as municipalities attempt to gear up for additional expenses associated with more flooding. Speculators have even suggested a negative coming market shift in coastal properties as climate change affects real estate to be as bad as the mortgage crisis a decade ago.

What I think is that everyone needs to take a breath. Yes, there could be a change to the real estate market for coastal properties, but do we really know when and how severe that will be? Comparing it to the mortgage bubble crisis 10 years ago is really just someone’s opinion. Should buyers not buy waterfront property based on these early reports? Maybe if you have zero tolerance for risk in your life. If that’s the case, better not invest in property at all because who knows, based on a lot of recent reports, beings from other solar systems may be visiting us and who knows what their agenda is. In addition, not all coastal areas are created equal; some are more at risk than others and a little research will help buyers determine that.

So be careful what you read. It may all come true, but right now I don’t care who you are, no one really knows what property values will be in 2050. Just go to the beach and enjoy.

Castles in the Sand

When did $100,000 not become enough?

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

Once upon a time if you were earning a six-figure salary you were sitting pretty. You could easily buy a home, make sure your kids went to the right schools and take that one family trip a year. Well, those days are over and have been for a while.

There has been a lot of talk about owning versus renting in the low inventory, high priced real estate market that has taken over most of the country. Some of the newly-minted renters are happy to be renters avoiding the responsibilities, cost and repairs of owning a home. But more and more high-earning Americans who would ordinarily own a home are renting.

In 2019 about 19% of U.S. households with six-figure incomes rented their homes. This is up from about 12% in 2006 according to the Census Bureau data. This increase is equal to about 3.4 million new renters who would have likely been homeowners a generation ago, and builders and investors of rental properties have taken notice.

Two of the largest single-family landlords in the country, Invitation Homes and America Homes 4 Rent, report that their average tenant earns $100,000 a year. These companies and others who are targeting this specific market say they like the high earners who aren’t interested in moving around and are willing to absorb regular rent increases and other financial blips in their lives. These are the people who previously would own a home.

Although a $100,000 income is still comfortably higher than the median household in the country at $63,179 in 2018, it’s still short to get into many homes. Americans today have more debt because of car payments, college loans, health care premiums and credit cards than their parents and grandparents who lived more prudently. Most middle-class Americans accumulated wealth by owning a home which was the great wealth leveler with half of the housing wealth owned by the middle class. This happened right after World War II when owning a home became the expected norm.

But norms change especially in real estate and young singles and families have no qualms about paying high rent for what their grandparents would have considered a waste of money. The danger here is that once you’re in an expensive rental it becomes harder and harder to save the 20% usually required to purchase a home creating a permanent renter class.

All of this said, there are indicators recently released by the Commerce Department that the number of Americans who own a home grew through the summer months. The homeownership rate modestly ticked up to 64.8% in the third quarter from 64.4% a year earlier. This number matches the highest levels in five years and is getting close to the long-run average of 65.2% of people in the country owning homes.

In addition, according to S & P Core-Logic Case-Schiller National Home Price Index, the average national home prices grew 3.2% in the year ending in August up slightly from 3.1% the prior month. And, of course, this is all on the background of still extraordinarily low mortgage rates staying below 4% in most regions on a 30-year, fixed-rate loan.

In the instant gratification world we live in, it’s not surprising that younger generations don’t care a fig about building wealth. That’s a concept so far down the road for many of them it might as well be in a different solar system. But I’m old fashioned, and it bothers me that homeownership may become a victim of the six-figure income. Say it isn’t so.

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Castles in the Sand

The fun and not-so-fun of buying a home

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

Labor Day has just passed and in some parts of the country, that signals the end of summer – but not in Florida. We still have plenty of hot weather and hurricane threats, think Irma, but September does signal the beginning of buying season or at least the beginning of the thought process of buying a home.

Looking for a new home is fun with a capital F. Who doesn’t love HGTV, online home listing websites and going to open houses? It’s getting to the actual making of an offer and getting it accepted that is the not-so-much-fun part.

Choosing a realtor to purchase a home may not seem as important as choosing one to sell a home, but it is every bit as important. You want someone who has the proper sales credentials in the area of your choice, who understands the values and what’s been on the market and for how long. You want someone who can guide you in applying for a mortgage, recommend an attorney and tell you which schools are in the area.

But most of all, you want someone you connect with and who will communicate with you on a regular basis, especially one who has their pulse on the market and is keyed into new listings as soon as they hit. Keep in mind that this person may not be your best friend or your brother-in-law in spite of how much you love them.

Once you’ve found the perfect home, you will complete the offer-to-purchase form with your broker or with an attorney. In addition to the actual dollar offer, other details will be the amount of financing, if any, the down payment upon contract or earnest money; the requirement to have the home inspected; closing date and whether or not you plan on employing an attorney. The earnest money is kept in a broker’s escrow account and is returned to the buyer if the transaction does not close.

All of the above are considered contingencies to the contract and have specific guidelines. For example, if you’re applying for a mortgage you will have a specific number of days to obtain a mortgage commitment after contract. Usually property sales that involve financing are contingent on the buyer getting a mortgage commitment; no commitment, no contract. A bank appraisal will be required prior to a mortgage commitment, and if the appraisal is below the agreed-upon price, the deal is off unless the buyer and seller come to different terms. Other contingencies also are a home inspection within a specific number of days, clean termite inspection, well and septic tests.

Generally, after an initial offer, there is a counteroffer. Counteroffers can be in the form of a higher sale price, removal of some of the contingencies, a different closing date and even personal property within the home. This is a negotiation process, and all parties to the transaction should attempt to work with an offer, even if at first it appears to be unworkable.

Finally, you’re in contract, all inspections are good to go, your mortgage commitment is in and the movers are booked. There is one more final and very important step – the final walkthrough. Just prior to closing, usually the day of or the day before, the buyers will do a final inspection of the property to verify that there haven’t been any major changes since the last time they were there. If repairs were required, check to make sure they have been made satisfactorily and that the property is broom clean except for personal items or furniture that both buyer and seller agreed to leave.

That’s it. You did it; you bought a home. Now wasn’t that fun?

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Castles in the Sand

Uncovering a home’s defects

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

The definition of “disclose” is to uncover or reveal. When it comes to uncovering problems in a property you’re interested in purchasing, the pathway is cluttered with rules that are frequently unclear. Nevertheless, about once a year I like to do a column about real estate disclosure, and late summer is a good time to review this in preparation for the upcoming selling season.

Last week I focused specifically on disclosing previous flooding incidents. This week I’ll touch on many of the other aspects of home disclosures.

In an effort to protect buyers, many states are holding sellers responsible to disclose defects before closing. Since 1985, Florida law has provided for that as well.  As we reviewed last week, the Florida Seller’s Disclosure form is not mandatory for sellers to fill out and sign, however, they are still required to disclose any material defects in the property that could affect the value of that property if they are aware of it, and this is where it gets foggy. If a seller states he/she has no previous knowledge of, for instance, sinkholes and after the closing a sinkhole develops, can the new owner hold the previous owner responsible? According to state law, after closing the onus is on the new owner to prove that the previous owner knew about the defect and willfully did not disclose it.

Some of the points covered on a seller’s disclosure are potential claims against the property or pending court cases, including in the case of condominiums; special assessments that have been approved; all of the HOA or condominium association rules and fees, boundary issues for single-family homes; the aforementioned sinkholes; and environmental hazards such as asbestos, lead paint, mold, Chinese drywall construction, and wood-destroying organisms. Disclosure also includes the condition of major systems, like plumbing, air conditioning and heat and electrical. Condition of appliances is also a disclosure item as is in-ground pools, hot tubs and, of course, roofs.

The approximately six-page form does not specifically ask about property tax, which is easily acquired from county property rolls, but sellers are generally asked what the annual property tax is, flood insurance if the property is in a flood zone and frequently utility bills. Buyers should not rely on any information about taxes and certainly not utilities. The amount of property taxes that the buyer may be obligated to pay in the year subsequent to purchase will undoubtedly change since a sale triggers reassessment of the property generally based on purchase price.

Finally, sellers will be relieved to know that if the property was the site of a homicide, suicide or death, it is not considered a material fact and does not need to be disclosed. Further, according to Florida law, if the property was inhabited by an individual with HIV/AIDS, it is not required to disclose this fact. Also, if the seller shares with you or the real estate broker that they believe the house is haunted, there is no legal disclosure ruling one way or the other; essentially the law is silent on this.

Pretty much you can assume that any tangible defect related to a property needs to be disclosed, whether it is in writing or verbally. However, I would encourage all sellers to fill out the written disclosure statement providing the buyers with a feeling of transparency and avoiding any misunderstandings about the condition of the property. Nice when things are uncluttered.

Castles in the Sand

Are you as smart as a private equity firm?

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

The phrase, “follow the money,” goes back to the Watergate era as a method to shed light on corrupt activities by looking at money transfers. But following the money does not always lead to corruption. It could lead to some really good business advice.

Last week we reported the May real estate sales statistics in both Manatee and Sarasota counties being up substantially to the point of registering the highest numbers post-recession. Manatee County’s median single-family home sale prices were up 4.9% from last year continuing the $300,000 or above median sales price for most of the past year and a half. How much of this increase in selling price is fueled by investors, we have no sure way of knowing. What we do know is investors are totally into the U.S. real estate market.

Based on data released by CoreLogic, Inc., last month more than 11% of U.S. home purchases in 2018 were made by investors. This is a record high of investors, the highest recorded and nearly twice the levels before the 2008 housing crash. Investors are purchasing to flip properties or turn them into single-family rentals. The investor profile is everything from big private-equity firms to real estate speculators and individuals who want to get in on the action.

Investors swooped into the housing market in 2011 and 2012, buying with all cash when prices were low and mortgage credit was difficult to get for the average buyer. Economists gave them credit for helping to stabilize the market but expected the investors to slow down when prices started climbing after everything returned to normal. However, that hasn’t happened, partly because of strong rental demand.

Unfortunately, much of the rental demand is coming from first-time buyers, specifically millennials who are competing with investors that are buying up the low end of the real estate market with all cash transactions. According to the CoreLogic survey, investors purchased one in five homes in the bottom third price range in 2018, exactly where first-time buyers generally start at.

Complicating things further for first-time buyers is technology. The internet has made it easier for smaller investors and foreign buyers to purchase properties sight unseen. A few weeks ago, I talked about iBuyer companies, such as Opendoor, Zillow and Redfin that offer cash to homeowners who want a quick deal, avoiding the stress of putting their homes on the market.

These properties are either flipped or sold to investors for potential rentals. CoreLogic further reported that investors bought about half of the starter homes in Philadelphia last year and about 40% of the lower end of the market in Detroit. Again, first-time buyers are being run over by cash investors and technology.

Investors are also banking on renting vs. buying being a double-edged sword. Owning their home has always been the goal of Americans and many feel that renting is inherently wrong and a waste of money. Now, however, first-time buyers are rethinking that calculation. Mobility for job advancement is important to millennials who understand that about five years is the break-even point between owning and renting and may opt to rent until their careers are stabilized.

Renting instead of buying is a conversation that doesn’t make me happy. I still believe that owning your own home has more benefits than renting and should not be entirely a business decision. My opinion – follow the money straight to your new home.

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Castles in the Sand

We may be getting older, but we’re not stupid

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

Did you know that every day 10,000 baby boomers turn 65? Just to refresh your aging memories, baby boomers are defined as those born between 1946 and 1964, therefore, baby boomers will be impacting our society for a lot longer. So, what do the smart real estate professionals do? They market smart houses and aging in place.

This is becoming such a hot topic that the continuing education course required of real estate licensees every two years contains two entire modules on smart homes and senior living. These are some of the more important points covered and tested in the most recent course.

A smart home is one that provides comfort, security, energy efficiency and convenience. These are all features that not only help seniors but also can improve property values especially for homeowners and prospective homeowners who are baby boomers.

When you’re talking cost to value in real estate, it’s always a balance between what it costs to make an improvement versus what the return will be. Well, based on a Coldwell Banker survey, 54 percent of homeowners said they would add smart home products if it made a house sell for more money. Sixty-five percent of those would pay $1,500 or more to add smart home features, and 40 percent would pay up to $3,000 or more.

In addition, Market Watch reports that the number of smart homes in North America is expected to hit 73 million by 2021 or more than 50 percent of all households. Unfortunately, real estate appraisers are just starting to give value to smart homes.

Smart homes are starting to have a very big impact on baby boomers who apparently prefer the phrase thriving in place as opposed to aging in place. Sixty-one percent of those over 55 are planning to stay in their homes indefinitely and 67 percent of those over 55 believe smart home technology could help them. Whether you’re thriving or aging, there are things that can help you live independently and safely.

Certainly, the most important smart features for seniors is health monitoring devices. There are many devices designed to monitor blood pressure and other vital signs that send alerts to a family member, physician or health care professional. There is a device to alert family members if a senior is not in his/her home or within a specific range and medicine containers that beep if the medicine is not taken. And one very practical device will automatically turn a stove off if it is left unattended for a predetermined length of time.

Next, are all of the convenience and security smart innovations – smart locks to avoid being locked out, smart home security monitors when not at home, smart sensors to track movements within the home and smart devices to let you and a family member know when a door or window is unlocked.

There is smart lighting that can be voice activated, smart thermostats and smart appliances which can create shopping lists and even give you the ability to look inside the refrigerator, monitor oven temperatures and activate your robotic vacuum cleaner.

Lest we forget the all-important remote shopping, ordering anything online, whether it’s clothes, books, your grandchild’s birthday present or food, has become second nature to people. Out of all progress made in smart homes, seniors having the ability to have things delivered is probably the biggest innovation and is growing daily.

If you’re a baby boomer or older, get smart. Don’t fight the technology, embrace it. It will only make your life easier and may also improve the value of your home. Remember – thrive, don’t age.

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Castles in the Sand

Real estate process speeding up

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

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

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

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

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

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

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

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

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

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

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Should you digitally – or actually – renovate?

Castles in the Sand

Should you digitally – or actually – renovate?

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

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

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

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

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

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

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

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

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

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

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

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

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Technology can’t replace real estate brokers

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

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

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

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

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

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

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

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

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

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Cooling temps cooling market

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

It’s a little chilly outside as I write this, however, it is December and even Florida starts to cool down a little. But is the cool weather a harbinger of our real estate market cooling off? It’s possible based on how the national markets are faring.

According to the National Association of Realtors, existing home sales in the country have declined for eight straight months. This is the longest slow-down in more than four years even after the U.S. economy has had one of its best six-month periods in a decade. The unemployment rate is near its lowest level in 50 years and the stock market for the first half of 2018 was exploding.

In conjunction with this, home sale prices also slowed based on the national statistics for September for the sixth consecutive month. The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas, reported that for the year ending in September, home selling prices rose 5.5 percent compared to 5.7 percent a year ago. So why is one-sixth of the country’s economy not growing at the same pace as the rest of the country?

Part of the reason has been the rising interest mortgage rates. According to Freddie Mac, the 30-year fixed-rate mortgage rate was 4.75 percent in mid-December. This is up from below 4 percent at the start of 2018, resulting in an increase of inventory in some markets.

A slow-down in prices is not necessarily a bad thing for some buyers who may now gain entry into the housing market after five years of rapidly rising prices, in spite of increased mortgage rates. It might also give these buyers the opportunity for their wages to catch up with the decline in pricing, again depending on which part of the country they’re in.

Some of the markets around the country that are seeing price growth are Las Vegas, Phoenix and Tampa. These are also some of the cities that had some of the biggest losses and gains during the last housing cycle. And we may not be done, according to Lawrence Yun, the chief economist for the National Association of Realtors, who says that sales seem unlikely to rebound in the short term.

There is, however, one area of the real estate market that is humming, and that’s home refinancing. Homeowners who may have decided not to move are taking cash out of the equity in their homes to make improvements, buy down credit card debt or send the kids to college. Their calculation is that even if the mortgage rate for a refinance on their mortgage is higher, in the long term it’s still cheap money spread out over the life of the mortgage.

The danger of course is overextending, home values fall, and you end up owing more than the home is worth. This is exactly what happened during the financial crisis, and even though safeguards have been put in place, homeowners still need to be prepared for any eventuality.

Like all things in the crazy financial world we’re living through, we’ll just have to wait and see if we’re facing a cooling-off period or just a blip on the radar screen. But don’t let that keep you from having a wonderful New Year celebration and an equally wonderful new year.

Castles in the Sand

Red tide, hurricanes and interest rates

Written by Louise Bolger on . Posted in Uncategorized.

It’s been a strange year and a few months for real estate. Irma took a toll, although not a devastating one, but enough for us and prospective buyers to sit up and take notice. Then the red tide rolled into town and took its time leaving, with traces still floating around, and then interest rates went up, putting a damper on the housing market nationally and the potential that it could trickle down to us. In spite of, this Anna Maria Island still keeps moving forward with selling prices holding and buyers still looking.

Since everyone in real estate, homeowners and professionals alike, are always interested in the upper end of the market, it’s time to do an analysis of $1 million and over sales and listings for residential properties including condos and vacant land. We’ll take a look at July, August, September and October. The closed property numbers are from the Manatee County Property Appraisers Office and the available or pending properties as of this writing are from realtor.com.

Cortez had two properties close over $1 million; last time this tiny area didn’t have any. The city of Anna Maria had 17 properties $1 million or over close during these months ranging from $1,000,000 to $2,500,000; during the previous analysis, there were nine. The combined cities of Holmes Beach and Bradenton Beach had 14 over $1 million closings during these months, ranging from $1,100,000 to $5,000,000. In the previous analysis, there were 19 sales.

As far as currently on the market or pending, Cortez has five, ranging from $1,099,900 to $1,500,000, which is a waterfront lot. During the previous analysis, there were four properties in this price range. The city of Anna Maria currently has 51 properties over $1 million, ranging from $1,049,000 to $5,200,000. Of these, two are over $3 million, and two are over $4 million. Last time, Anna Maria had 64 properties listed at $1 million or more.

And the combined cities of Holmes Beach and Bradenton Beach have 68 properties currently listed over $1 million, ranging from $1,000,000 to $7,775,000, which is a large waterfront parcel of land. Of these, two are over $3 million, three are $4 million or over and one is over $5 million. Last time these cities had 77 properties available in this price range.

Although not exact, the numbers are fairly consistent. Much of the country is experiencing a slowdown of the real estate market because of the lack of inventory driving up prices but resulting in lower sales. We too see that in our marketplace, but we also have the additional element of a reputation for hurricanes and the persistent red tide, which is getting a lot of media publicity around the country. Now that we’re getting into the busy selling season, we should have a clearer idea of the availability of buyers.

I was on Palm Beach Island for a weekend a few weeks ago, and $1 million properties don’t even exist on that island. But on this Island, we have plenty, and, hopefully, that trend will continue into the new year.

Wishing everyone a peaceful and merry holiday.

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