SW Florida Home Loan Prospects Undisturbed by Wall St. Jitters. We all remember Freddie Mac and Fannie Mae, the twin quasi-public organizations who backstopped the home loan industry for the whole country. Freddie and Fannie were thought by some to be on the verge of extinction during the home loan crisis, but they revived when Washington stepped in. Freddie’s latest quarterly financials show assets that have a small ‘t’ in front of the number (that’s short for ‘trillions’), so it looks like they aren’t about to go out of business. In fact, whenever one of today’s SW Florida home loans is originated, Freddie or Fannie are probably in the wings. They remain the big guns in the U.S. secondary home loan market, which is so huge its repercussions are felt globally.
Of course, it’s more complicated than that, but so that we don’t have to tread any further through the red tape, let’s just sum up by acknowledging that when Freddie or Fannie sneeze, the entire planet is apt to grab for a Kleenex. Since August saw a good share of planetary financial upset, optimism from Freddie and Fannie would be a relief—particularly for future SW Florida home loan applicants, who might be a bit rattled by the recent swan dive on Wall Street. ‘What does it mean for the availability of mortgage loans?’ they might well be wondering…
Last week it was a good sign when the stock market emerged from the air-raid shelter where it had spent the previous weekend. By Friday, the S&P 500 had made back “modest gains” (T. Rowe Price) after enduring the highest volatility in four years. But the housing markets looked a good deal more stable, if we were to believe Freddie.
The hard facts can be elusive, so Freddie Mac puts together something called the “Multi-Indicator Market Index,” which measures the stability of the U.S. housing market. Mid-week, it released the latest reading, which prompted the National Mortgage News headline “Housing Markets Improve Nationwide: Freddie Mac.” The Index came in at 80.3, an improvement of 1.33% compared with a month earlier. In case that doesn’t sound like a gigantic change, Freddie’s Deputy Chief Economist, Len Kiefer, was there to clarify. “Housing markets are the strongest they’ve been in years,” he told the press.
Freddie reads various home loan industry reports, as well, and passes them on to its web site visitors. Headlines there were equally comforting—
• “S&P Case-Shiller: Home prices continue to rise in June” (HousingWire, August 25)
• “Housing market gains steam as July new home sales rebound” (Marketwatch, August 25)
-and most reassuring of all:
• “Why the economy is OK, even if stocks aren’t” (CNN Money, August 24)
SW Florida Home Loan Prospects Undisturbed by Wall St. Jitters. So for the moment, it does look as if SW Florida home buyers and sellers needn’t be distracted by the news from Wall Street—good or bad. Especially since U.S. 30-year fixed mortgage interest rates were down again for the week…many below 4%! If you’ve been thinking it might be a good time to investigate today’s SW Florida real estate market, I couldn’t agree more: time to give me a call!
Showing a SW Florida Property – Occupied or Not, it’s a Balancing Act! In a perfect world, before you set about selling your SW Florida property you would have emptied it of all evidence of human habitation, called in the best staging pros on the planet, and set off to vacation in a Caribbean island spa-hotel so you could sift through the dozens of offers in comfort.
“Let’s see,” you would soon be musing to no one in particular, sipping your first mimosa of the afternoon as you thumbed through the sheaf of faxes from your SW Florida agent; “should I accept this all-cash offer for 150% of comparable value—or hold out for this one for 200% of comp that came in with only 50% earnest money…?”
It is here where we might best depart from this reverie to point out that in this less than perfect world—the one that we actually live in—the more probable situation is one where your SW Florida property is fully occupied, either by your own family or a tenant.
How do you make the most of that mimosa less situation? If you and your family are the occupants, your SW Florida property fits the most common profile, so the standard to-do’s apply: you will want to clear the clutter and store any non-essential furnishings; de-personalize as much as practical; deep clean; and work with your agent to make showings as routine as possible.
But what if you have a tenant? It’s going to be a true balancing act that affects four parties: seller, listing agent, tenant, and buyer. Of these, the one with the least to gain is the tenant, who is paying for the privilege of tenancy while being asked to keep the property clean and showable on the others’ schedules.
Let’s face it: this could be a minefield. Almost any tenant’s interests lie elsewhere. In fact, they may very well like your SW Florida property so much they would just as soon discourage prospective buyers—and there are subtle (and less-subtle) ways to go about that!
One solution that is sometimes offered involves this creative procedure:
Compensate the tenant for their cooperation by offering a significant bounty (say, 20% of the monthly rent) to be placed in an escrow account. It’s a meaningful award for the tenant’s full cooperation—one that will grow with the payment of each month’s rent. It will be turned over upon the completion of the sale. This ingenious plan has the effect of reversing the natural order of things. Since the amount in escrow grows with each passing month, rather than becoming increasingly annoyed with each ensuing showing, the tenant is increasingly incentivized to make the property ever more appealing. There’s cash on the line! In fact, as the escrow account builds, who’s to say the tenant won’t start doing some arithmetic…and start considering becoming the buyer himself…???
In any case, the best results for selling your SW Florida property happen when there is rock-solid communication between the listing agent and owner—and when a tenant is involved, that’s another party who should be included as well. It’s the best way to insure that everyone can go about their business with a minimum of disruption and inconvenience.
Showing a SW Florida Property – Occupied or Not, it’s a Balancing Act! If you are sizing up the coming fall market, whether your SW Florida property is occupied by a tenant or your own tribe, I hope you will give me a call to discuss how I can get the results you’re after!
SW Florida Virtual Tours: They Come in a Variety of Flavors! For many homes that will be listed for sale in SW Florida, virtual tours will be part of their prospective buyers’ experience. It’s increasingly common that in addition to the eye-catching still photographs that enhance the online listing, some form of clickable virtual tour is there, as well.
Most frequently found are virtual tours that are actually still shots that can be displayed sequentially—this kind of virtual tour could more specifically called a ‘virtual slide show,’ because the viewer is in control of the speed at which the photos appear. When a one-click ‘play’ symbol is onscreen which triggers automatic playback (frequently with musical accompaniment or even narration), it really does produce an experience that’s like an actual tour. And further enhancements can be added, like pans across (and zooms into or out of) the still shots, creating the feeling of movement. When music or narration are added, the result can be quite effective.
Another SW Florida virtual tour is more ambitiously produced: the shots in it consist of some (or all) motion sequences that are created with a video rather than still camera. When the camera is set into motion—as when it moves down a path or through a doorway, it can convey the feeling of actually ‘being there’ more effectively than stills. For the viewer, there is a subtle difference between what is experienced when viewing a computer-created sweep (“pan”) across a still image of a room versus a video camera actually panning across the same scene. In the video, there is more of something like a 3-D experience because the objects in the room shift in relation to one another. Not a lot…but just enough!
So which is the most effective form for a SW Florida virtual tour? The answer is…not what you might expect. The format, whether stills, moving stills, or video is really not what makes the greatest difference. It’s vastly more important that in any format, what’s being shown is almost all that matters—or as they say in Hollywood, it’s lights! camera! action!
• Lights—blotchy lighting with areas of impenetrably deep shadows may be fine for film noir productions, but for your virtual tour of your area home, it’s a negative. A skilled photographer or videographer will see that most areas are cheerfully, brightly exposed.
• Camera—most (if not all) your images will work best when a very wide-angle lens is used. It gives the impression of spaciousness.
• Action—in both video and slideshow modes, the speed at which images move should be slow enough that viewers don’t find it dizzying, yet fast enough that the pace of the ‘production’ isn’t annoyingly pokey (like this current virtual tour, which zips right along in a progression that makes sense—like an actual tour).
SW Florida Virtual Tours: They Come in a Variety of Flavors! An SW Florida virtual tour can provide a genuine boost to your home’s selling campaign when it is attractively produced—and accurate (thus avoiding showings to prospects for whom the property is clearly unsuited). It’s only one of the many tools which can be called into service to draw the interest of the qualified prospective buyers you need to reach. Call me if you’d like to discuss what’s happening in today’s market!
One Housing Solution SW Florida Homeowners Can Do Without. SW Florida residents been hearing about unbelievably tight housing situations in some U.S. cities for many years, but last week there was one report that would have challenged any imagination. This was about a Wharton School graduate who is spawning a new way to afford rents in the San Francisco Bay area. His solution: live in a shipping container.
The article appeared (with pictures) in Bloomberg Business. The photos weren’t exactly flattering of Luke Iseman’s 160-square-foot “box”—in fact, the bright blue painted walls seemed definitely in need of a decorator’s input (not to mention the cords and ducts strapped from ceiling to floor). With a shower constructed from discarded boat hulls and a camp stove set atop what appears to be a deconstructed wooden crate, the overall look might be described as post post modern urban chic.
But Mr. Iseman is making progress turning his container housing option into a business. In fact, he is already presiding over 11 of the “miniature residences,” where his tenants live inside a warehouse he leases across the Bay from San Francisco.
In case SW Florida real estate watchers suspect this is a less-than-serious attempt to forge a new kind of rentable living arrangement, a quick review of housing costs in the City by the Bay will have them thinking twice. According to Bloomberg, the median rents in June jumped 16% from a year earlier (15% in the wider metro area). Median sales price is over $1.1 million in the City.
The chief market analyst for one S.F. real estate outfit put the housing situation in perspective. “People have to get creative,” he said. Bloomberg put its perspective another way: “The market…is crazy…”
Iseman’s “new model for urban development” does have some serious hurdles to clear before the “more sustainable, affordable and enjoyable” urban development model gets much further. One of the hurdles is that it’s illegal—he’s already been rousted from two other sites. But with Bay Area building inspectors busy dealing with converted garages, offices, living room conversions and other unlicensed structures (like rental tents), his startup concept may last a while longer.
What seems somewhat comical to SW Florida observers is actually a creative answer to a very real problem. Iseman had been paying $4,200 a month for a badly maintained two-bedroom apartment before he thought up the container idea. He bought his first container, which had been classified as industrial waste, for $2,300 (delivered), spent $12,000 converting it, and voila!—suddenly he had himself some affordable East Bay housing. In and around and area where 10 jobs are added for every new residence, who’s to say this stop-gap solution might not prove to have some staying power?
One Housing Solution SW Florida Homeowners Can Do Without. One thing is for certain—our SW Florida real estate scene is going to continue to offer a choice variety of affordable housing offerings, even without the benefit of shipping containers. Give me a call whenever you’d like to go over the wide range of opportunities today’s market is providing.
SW Florida Home Ownership and the American Dream Debate. This summer, SW Florida home owners have been experiencing both the start of a blistering political season and, simultaneously, what the newspaper writers call the ‘summer silly season.’ The politicians have hit the campaign trail in earnest, but in many other realms, folks tend to be on vacation (or wishing they were). The result is that very unimportant stories make the evening news: the silly season. If you saw any of last week’s multiple replays of the baby deer playing with the rabbit on a lawn in Colorado, you know what the deepest part of the silly season gets you: Bambi and Thumper making headlines.
But in the political realm, there’s also been a renewal of the quadrennial discussion about whether the whole American Dream is dead. That means it’s time to discuss the abstract idea and its relationship to the very concrete one: The American Dream, and your SW Florida home.
For sure, “The American Dream” means more than simply owning a home in SW Florida (despite the fact that those of us in real estate would like to see it included in the definition). The three words in TAD make up one of the few phrases that, even though we all know it means different things to different people, still triggers a degree of reverence. When a politician brings up The American Dream it’s probably because it’s a topic that most listeners will identify with—one that causes people to feel both nostalgic and protective.
“The American Dream” evokes apple pie and Aunt Em; Tom Sawyer and a horse-drawn trolley on Main Street. It’s an American past we all experienced, sort of (we went to Disneyland, after all!). Pollsters tell us that safeguarding future generations’ access to The American Dream is an obligation most Americans accept: in fact, this year’s 60 Minutes-Vanity Fair poll says that to 44% of Americans, giving their kids a better life is its very definition.
At least in the 20th century, to a very great number of people TAD also went hand-in-hand with owning a home of your own. But does it still include home ownership? Wikipedia offers a comprehensive roundup of ideas about TAD, which includes a subsection on Home Ownership (but it also has sections on the American Dream in Britain…and Russia…and even the People’s Republic of China!) It makes you wonder—can the American Dream be in bad shape if it’s so contagious? And if owning a home is no longer a part of it, how come the SW Florida’s residential real estate market is bouncing back so vigorously?
SW Florida Home Ownership and the American Dream Debate. The season may be the silly in some newsrooms, but when it comes to listings and showings in this summer’s SW Florida home market, these weeks are a most undaffy time of year— and an excellent time to give me a call!
Home Buying Genius Test Can’t Deter SW Florida Home Buyers. One of CNN’s most popular sites is called CNN Money. Dollars and cents are its singular focus—no film reviews, fashion statements, or political insights. For SW Florida readers minding their bank accounts, it makes consistently interesting reading.
The other day, an eye-catching ad for CNN Money appeared on the screens of real estate sites. If you’d been browsing the SW Florida listings, there it was, with this challenge: “Are you a home buying genius?” For anyone who couldn’t be absolutely sure of the answer, the ad led to an online quiz. A simple mouse click brought up the first question.
It was a good thing CNN Money isn’t called CNN Grammar, because the first question was “How will a bad credit score effect (sic) your ability to buy a home?” The choices were four, starting with “I may not qualify for a mortgage.” Then came, “I may need a bigger down payment;” “I’ll have to pay a higher mortgage rate;” and the last, “All of the above.” They all looked possible, so SW Florida home buying geniuses had an easy time with that one.
But others could have tested the neurons of any home buying Einstein.
“What’s the most surefire way to get the financing you need?” was one. “Play the Power ball” was clearly not the right answer, but the difference between “Get pre-approved for a mortgage” (choice #2) or “Have the mortgage per-underwritten” (#3) might depend on the SW Florida mortgage broker’s office terminology. If you went for #3, you got it right.
If you knew that SW Florida closing costs usually run between 2%-5% of the selling price, you had another right answer. Likewise, if you chose the standard “28% of your gross monthly income” as the most you should budget for a mortgage payment. By now, it had become clear that this quiz had been put together by someone with an interest in promoting mortgage loans. All the questions were dealing with mortgages, and now ads for national mortgage outfits were beginning to appear at the bottom of the screen. Since this is nothing new when it comes to web quizzes, most readers would have kept at it.
They would have run into one question about how much savings you “should have left” after you buy a home—the kind of question that could start a debate. This one could challenge any genius. For instance, if you are The Donald, you really wouldn’t need the “at least six months’ worth of savings” that was ruled the right answer. The explanation sounded reasonable (“you’re probably spending freely to furnish or update the place”), but what if you had just bought a new home or one of the spotlessly renovated SW Florida listings that are now on the market? The amount it would cost to move in could just as easily be next to nothing!
Such quibbling in internet quizzes isn’t allowed. If you got all the answers right, you were pronounced a home buying genius (with an exclamations point)…and an offer to tell the world via Facebook or Twitter. If not, you could retake the test before you told anyone anything, which does seem a little bit like an offer to peek at the teacher’s answer sheet…
Home Buying Genius Test Can’t Deter SW Florida Home Buyers. In my opinion, you don’t have to be a SW Florida home buying genius to score a spectacular home in this summer’s offerings. The properties are there, and the financing numbers are still historically terrific! It won’t hurt to have a knowledgeable professional clearing the way, either. Just call, anytime! Thank you…
SW Florida Builders Take Note: a “Spec” Home that’s One for the Ages. A SW Florida “spec” home is a residence that has been designed and built by a SW Florida entrepreneur who has no per-existing sales order. SW Florida spec homes are bold ventures: they have to be built with confidence that the design and execution will be attractive enough to generate a sale. To return a profit that’s worth the risk, the sale has to be realized quickly enough to offset the considerable costs advanced.
Dictionaries can be a little confusing about what “spec” is shortened from. Most ascribe it to “speculative,” but some (like Wiktionary) think it has to do with the builder following his own specifications.
I’d like to suggest a new third possibility—at least for one particular spec home. News about it comes to us from Bloomberg’s Business site, under the heading, “California Dreaming.” It’s about a spec home that’s being built on a grand scale…okay, maybe “grand scale” is too modest: it’s being built on an astronomical scale…a gargantuan scale…maybe more like a mega-galactic scale!
Because the asking price is going to be a half billion dollars.
Now, SW Florida real estate watchers may have thought that when Johnny Depp’s luxury property in France (the one that was actually a whole village) was listed a couple of months ago, we’d hit a sort of apex of residential real estate extravagance—but clearly, we were mistaken. A $500,000,000 asking price could buy you a lot of French villages like Depp’s. It could approach a province (albeit, maybe a fixer-upper province).
The California Dreaming spec home is, land-wise, a surprisingly modest offering. Only about 4 acres or, as the builder puts it, “1.6 hectares” (I believe this indicates a hopeful nod to potential foreign buyers). So, what will this home—which won’t be completed for another 20 months—offer that our run-of-the-mill SW Florida spec homes don’t?
For openers, the four acres (or 1.6 hectares) are in Bel Air, which is already a somewhat pricey neighborhood. All the hectares are situated on a hilltop with 360-degree views of the Pacific Ocean, Beverly Hills, downtown L.A., and the San Fernando Valley. Still, with the average residence sale in even that neighborhood weighing in at peasant-level prices (only $5.29 million), you’d think there must be a lot more going on.
There is. It will be roomy: 74,000 square feet in the main residence. And so you won’t have to feel hemmed in when guests show up, there will be three smaller houses. Unless you have more than 30 autos, the garage will also be ample. You’ll have four swimming pools, including a 180-foot infinity pool. To combat the California drought, the yard features 20,000 square feet of synthetic grass. To banish the boredom that might set in if the Queen fails to visit (synthetic grass won’t accommodate the corgis very well) there will be a 45-seat Imax theater. Still bored? There’s always the 8,500 square foot night club. At the end of a long night of TV-watching and night clubbing, there’s a 5,000 foot master bedroom to flop into…if you can find the bed.
SW Florida Builders Take Note: a “Spec” Home that’s One for the Ages. Compared with our SW Florida spec homes, I’d suggest the ‘spec’ in this one stands for ‘special.’ Very special. Meantime, in case you are too impatient to wait the 20 months for the California Dreaming mansion to be completed, we have a number of SW Florida properties that are a good deal more practical. Call me to zero in on the great values our summer market has to offer!