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Archive for May, 2016

How Do SW Florida Homes for Sale Fare in Election Years?

How Do SW Florida Homes for Sale Fare in Election Years? This one was news to me. The Wall Street Journal had it buried in a ‘spread sheet’ section of their online Real Estate section: “Why It’s Harder to Sell Your Home in an Election Year.” If you are like me—never having had an inkling that SW Florida homes for sale have rough sledding in an election year (like this one)—you’d have to read the details.

How Do SW Florida Homes for Sale Fare in Election Years?“The uncertainty of a looming election can cause a dip in home sales,” it detailed, “especially if the race is close.” The article was illustrated by a cartoon showing a neighborhood street whose every lawn was graced by alternate “vote!” signs and homes for sale signs. The underlying thesis was that in close elections, house hunters are reluctant to buy if an uncertain political future makes them unsure about their own financial fortunes.

This might sound reasonable from a logic perspective, but as you read further into the factual basis for the idea, you’re likely to start losing confidence.

The whole basis for the article is a political science paper published in 2014.How Do SW Florida Homes for Sale Fare in Election Years?

In the British Journal of Political Science.

Based on housing sales back in 1999-2006.

In 73 elections.

Most of us would begin to worry about why this couldn’t make the grade in a United States journal of political science, since it centered on U.S. elections. Perhaps a research quality issue? Then there’s the fact that those dates are 10-17 years old. There is also the puzzling notion that there have been 73 elections in the past couple of decades…but it turns out that they are dealing with gubernatorial elections from a select number of states. Perhaps our average house hunter How Do SW Florida Homes for Sale Fare in Election Years?checking out homes for sale in SW Florida actually does hang their financial fortunes on who the next Governor is going to be…but I wouldn’t bet on it.

As for Presidential elections, the article mentions a separate analysis that “uncovered a similar effect.” But, on closer reading, not really. This analysis was by someone who studied California sales only, and determined that in the Golden State, home prices rose by an average of about 1% less during election years. But they still rose by 4.5% in those years. If that means they were “harder to sell,” you’d have to explain why…

This is only a guess, but if you were trying to determine if it will be easier or harder to find buyers for SW Florida homes for sale in Election Year 2016, it seems more logical to look for factors that directly affect the buyers—such as today’s historically low mortgage interest rates. When buyers do the arithmetic showing how low monthly payments have become, I’m willing to bet that overshadows errant thoughts about who the next Governor is going to be.

How Do SW Florida Homes for Sale Fare in Election Years? If you are readying to buy or sell a SW Florida home, you probably don’t really need to worry about who will occupy the Statehouse as much as who will be helping you navigate the market. I hope you’ll elect me for the job!

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What’s More Important to SW Florida Renters than Interest Rates?

What’s More Important to SW Florida Renters than Interest Rates? You’d think that the single most influential factor governing a potential SW Florida home buyer’s decision on whether to buy now or hold off would be the ongoing bottom line—that is, the amount of an anticipated monthly mortgage payment.

What’s More Important to SW Florida Renters than Interest Rates?Maybe not.

The New York Federal Reserve argues otherwise. Not just a little bit otherwise; “dramatically” otherwise.

To cut to the chase (and that’s a good idea, for reasons that we’ll get to later), what is more likely to impact that decision—especially for those who are currently renters—is the size of the down payment. It follows that SW Florida home renters are more likely to be encouraged by any relaxation of down payment requirements than they are to be discouraged by a rise in mortgage interest rates (with the resulting increase in the monthly payment).

Upon reflection, the Fed’s finding isn’t so surprising. The slow-motion economic recovery and stall in wage growth has What’s More Important to SW Florida Renters than Interest Rates?made it tougher than ever for the average SW Florida home renter to scrape together a traditional 20% down payment. That would be why the FHA began to loosen down payment requirements (they started doing that in late 2013).

The details of the NY Fed’s study—Survey of Consumer Expectations—involved asking respondents how they would react to different home-buying scenarios. They measured the resulting “WTP”: Willingness to Pay, and found out…well, they found out a number of complicated things that we can leave for the statisticians to figure out—but one that stands out is that for renters (and we could easily imagine many of our own SW Florida home renters are among them), the amount of a proposed down payment is much more important than the interest rate. Everyone who has ever lived with an income that’s about equal to their expenditures understands why: rent money spent gets you nowhere, mortgage payments are different. They represent, in part, retained value.

What’s More Important to SW Florida Renters than Interest Rates?The reason that earlier we immediately cut to the chase was because the language in the study itself is part English, part FedSpeak (a language created by Fed spokespersons for the apparent purpose of foiling attempts to decipher meaning). For example:

“…since there is generally no exogenous variation in these variables that is independent of confounding factors (such as economic conditions or household characteristics), it is difficult to cleanly estimate these sensitivities empirically.”      

What’s More Important to SW Florida Renters than Interest Rates? Thankfully, that study was accompanied by a summary. The upshot for us is that the current hard-to-predict mortgage interest rate ups and downs may not be as important a WTP influence (at least where the SW Florida home renter population is concerned) as we might assume. What are always keys for swaying potential buyers are objective pricing, proper presentation, and energetic marketing. I can help with all of those—so call me! 

SW Florida Appraisals: by Definition, Part Art, Part Science

SW Florida Appraisals: by Definition, Part Art, Part Science. Built into the way an SW Florida home changes ownership is the institution of the appraisal report—the document which attempts to place a dollar value on the property in question. That word “attempts” is the key when it comes to appraisals. Although it would make life easier if SW Florida SW Florida Appraisals: by Definition, Part Art, Part Scienceappraisals consisted of completely objective, scientifically verifiable calculations, in the real world, they can’t be.

SW Florida appraisals are created by locating comparable properties that have sold recently on the open market, then adjusting that dollar amount to reflect the differences between them. That’s where perfect objectivity becomes…um…subject to interpretation.

If only any two homes were exactly the same in every detail, the latest price paid for one would be the best appraised value for the other. But even in the best case—say, two tract homes built at the same time with exactly the same features—their appraised values probably wouldn’t be exactly the same.  After all, they can’t occupy the same plots, and one location might be preferable. They might not have the same maintenance history, so one might be in better condition than the other. The landscaping could differ greatly…and so on.

This is the reason why adjustments need to be made—and why the skill of the appraiser is so important. (I’m tempted to say that’s why appraisers get the big bucks; but in fact, our SW Florida appraisers’ fees are actually quite reasonable). SW Florida Appraisals: by Definition, Part Art, Part ScienceDetails on how they go about finding fair value for those adjustments is the subject of a recently revived investigation done by CoreLogic’s Jon Wierks. For anyone who finds themselves relying on local appraisals to validate an asking price (or the home loan that will allow a sale to close), the report makes for interesting reading.

The focus of the piece was to elaborate on which adjustments are most influential in creating appraisals. By analyzing more than a million sample appraisals made between 2012 and 2015, the study determined which features had the greatest impact on the resulting evaluations. They disregarded any feature that didn’t appear on at least 10% of the reports—and came up with the most important features. If this were the Oscars, we’d now say, “the envelope, please”:

SW Florida Appraisals: by Definition, Part Art, Part ScienceMost frequently adjusted: LIVING AREA (no surprise here; square footage almost always differs).

Runner-up: ROOMS (that is, the number of bedrooms and bathrooms).

Greatest value adjustment: QUALITY RATING (the average adjustment came in at a not inconsiderable $15,000!).

Runner-up: OVERALL CONDITION.

These findings underline truly how important the skill and experience of the appraiser turns out to be, since the greatest dollar amount impact depends on the more subjective criteria. That’s even before taking into account that three free-form factors appeared in more than 10% of the appraisals. These miscellaneous factors, given the mysterious names “Other1, Other2, and Other3,” reinforce how unclassifiable are the differences between most properties and their closest comparable neighbors.

SW Florida Appraisals: by Definition, Part Art, Part Science. When it comes to SW Florida real estate, I aid in every aspect of the process. I hope you’ll think of me (and definitely give me a call!) when the time to buy or sell approaches.

You are the Ultimate SW Florida Real Estate Agent Recruiter

You are the Ultimate SW Florida Real Estate Agent Recruiter. A sizeable portion of the recruiting business has gone online, and a lot of small and medium-sized businesses are using them. We hear a lot of ads for them—promising job You are the Ultimate SW Florida Real Estate Agent Recruiterhunters an efficient way to distribute their resumes; promising business managers an efficient way to attract new talent.

Busy SW Florida business managers are assured they’ll snag quality candidates to fill their open positions by simply filling out an online form describing their job vacancies. Some even promise to deliver the resumes of dozens of candidates almost overnight (if not actually overnight!) using their online job-hunting database systems. What is left unsaid is what personnel professionals know to be the most important next step in the recruiting process: the interview.

If you are wondering what this has to do with you and SW Florida real estate, the answer is just about everything! If you are selling your home or condo (and are among the nearly 90% of people who team up with a real estate agent to help get it done), your choice of agents makes you a personnel manager. You are the CEO of your own home selling enterprise; you’re the boss. And all experienced business owners will verify that just collecting resumes and leafing through them is not good You are the Ultimate SW Florida Real Estate Agent Recruiterenough. Not when you’re looking for top talent.

It takes some winnowing; some qualifying; the willingness to make judgment calls. There are books written about effective approaches to interviewing, but you don’t have to have a business or psychology degree to select a SW Florida real estate agent you can have confidence in. And you don’t have to devote days to the process, either. There are a couple of pointers about the interview, and a shortcut to the whole process:

First, once you have picked out the names of a few SW Florida real estate agents whose qualifications seem to fit the bill, give them a call. Be clear and honest about where you are in the process, and let You are the Ultimate SW Florida Real Estate Agent Recruiterthem know you are pre-interviewing. You can do this over the phone. Let them present their qualifications briefly—and then get down to business.

  • Ask them for the names and phone numbers of two former clients and two current clients.
  • Then call the clients (be sure to thank them for their time at the end of the calls).

You’ll find out as much (probably more) this way than you would through hours-long conversations with the real estate agents themselves. By the time you have their clients’ feedback on how well they provide marketing materials, handle buyers, and stay in touch, you’ll be a local expert on SW Florida’s real estate agents.

You are the Ultimate SW Florida Real Estate Agent Recruiter. Once you determine which ones have the ‘A’ ratings, it will be time to sit down and have a couple of in-depth interviews—the kind that tell you how well you mesh on the extremely important personal level. By then, you’ll have the satisfaction of having done a professional job of selecting your agent who (I hope) is me!

SW Florida Jumbo Mortgage Outlook Continues to Brighten

SW Florida Jumbo Mortgage Outlook Continues to Brighten. “The Jumbo Jungle” may sound a little like the elephant compound in a wild animal park, but it’s actually a seldom-quoted tab under The Wall Street Journal’s online Real Estate section. The “jumbos” being discussed are the trunkless kind—the hefty mortgage loans whose center rings are found in SW Florida Jumbo Mortgage Outlook Continues to Brightenbinders instead of circus tents.

Judging from the latest discussions SW Florida homeowners will find lately, these jumbos aren’t about to become endangered anytime soon. For one thing, 2015 registered the highest activity for the behemoth loans ever. This year’s follow-up, according the WSJ, will be unlikely to slow the pace.

The reason behind the jumbo mortgage market’s strength has a lot to do with the down stock market. Last week ended with another swoon, led by the tech stock sector. Investors were thought to have been worried by some poor earnings performance and a general “realization that the world is slowing.”

According to Inside Mortgage Finance, jumbos accounted for a full fifth of all mortgage lending last year—the highest percentage of the market since 2002. SW SW Florida Jumbo Mortgage Outlook Continues to BrightenFlorida residents looking to borrow in the high-end market may also find a variety of interested lenders as asset investment dollars shift into real estate as “a safer investment.”

It was widely held that the market dip made it more likely to momentarily halt any rise in interest rates. By week’s end, mortgage rate research website HSH.com marked another drop in conforming rates, as well as the “Federal Reserve’s apparently more cautious position with regard to raising interest rates.” That “apparently” was probably well-advised, given industry experts’ recent history of hit-and-miss prognosticating.

SW Florida Jumbo Mortgage Outlook Continues to BrightenNonetheless, the Jumbo Jungle writers boldly headlined “WHAT’S AHEAD FOR JUMBO-LOAN BORROWERS in 2016.” Their answer was increased likelihood for jumbo loan interest rates holding below 4% “…for a while longer, which also could make borrowing large sums more attractive.” Going further, JJ quoted one mortgage sales manager suggesting that the fear of eventual rate rises could spur a “home buying frenzy” in the spring, adding to a rush of refinancing by adjustable-rate borrowers reaching the end of their fixed-rate terms.

SW Florida Jumbo Mortgage Outlook Continues to Brighten. SW Florida jumbo loan applicants won’t have to be in any kind of ‘frenzy’ to take advantage of today’s continuing low rates and a general move toward an easing of credit score requirements. I’m glad to help point my clients toward the most active local lending resources—those that consistently provide sound service to SW Florida  homeowners.  

When a SW Florida Listing Goes Nowhere, Two Action Guidelines

When a SW Florida Listing Goes Nowhere, Two Action Guidelines. Suppose you had done everything right: interviewed several SW Florida real estate agents and compared what they told you; prepped your property to near-perfection before the professional photographer’s arrival; confirmed all the descriptive details before they appeared in the SW Florida listings…yet six months later, the place still hadn’t sold.

When a SW Florida Listing Goes Nowhere, Two Action GuidelinesYour agent had done a reasonable job, it seemed—yet the results were disappointing. Not nearly enough showings for one thing. And even though the marketing materials seemed sufficient, the response had been, in the end, weak. What do you do now?

There are several guidelines to follow that will increase the likelihood of a timely sale. Of them, two are absolute must. One of them is well known­­—mentioned in every credible source of residential real estate knowledge. The other is seldom mentioned.

That first one is the obvious, universally recognized action item: doublecheck your asking price! If that amount is out of line, almost anything else you can do is likely to be wasted effort. If you require any future buyer to fall in love with your home to the extent that they will ignore better values that are on display elsewhere in the SW Florida listings, you are probably living in, as the English like to say, “cloud cuckoo land.” The wished-for result could happen—but it’s probably not going to happen to you.

The rock-solid evidence points in only one direction: people who seriously comb the SW Florida listings are planning to spend a large sum—so they will be noting and comparing prices. If your proposed number is far out of whack, they’re When a SW Florida Listing Goes Nowhere, Two Action Guidelinesunlikely to waste a lot of time investigating the details. If they show up at all, it’s very likely to be out of curiosity (“what in the world are these people thinking?”). The agents who bring them, will probably have warned their clients about the asking price. This is not how to sell your house.

The second guideline is equally important, but seldom mentioned. It is to continue to use common sense. Do not, in other words, take leave of your senses. Don’t dummy-up all of a sudden. Do not abandon everything you ever learned about doing any kind of business.

The reason that this important guideline is seldom mentioned is because you would not think it’s necessary to put it into words. That’s not always the case when your home has not sold, because of what happens next. After a listing in the SW Florida MLS has expired, a homeowner is likely to receive multiple solicitation letters that GUARANTEE that the sender’s company will be able to sell the property! They might as well write, “Take Leave of Your Senses! Sign here!”  

When a SW Florida Listing Goes Nowhere, Two Action GuidelinesThe reason that such solicitation promises exist is the frustration level their authors impute to the recipient homeowners. That, plus the fact that they can actually promise to sell the property…but there’s a catch. It’s associated with the first guideline. Yes, they can sell anyone’s house…for an asking price that’s well below its market value. (So could anyone else). But that’s not what any homeowner, frustrated or not, is looking for when they list with a SW Florida agent.

The cool, collected way to proceed is to decide whether the asking price is in line with the SW Florida competition—then seek an agent who will bring new energy and integrity into play. This should definitely not be someone who guarantees anything that common sense tells you cannot be guaranteed. Or whose introduction is misleading.

When a SW Florida Listing Goes Nowhere, Two Action Guidelines. If you find yourself in the process of re-evaluating your home’s selling strategy, I hope you’ll consider giving me a call to discuss a new, more promising plan of attack! Please Call Me TODAY!

Move from Single Family Home to SW Florida Townhome/Condo

Move from Single Family Home to SW Florida Townhome/Condo. When an SW Florida couple begins thinking over the pros and cons of downsizing their family’s home base, one increasingly attractive possibility is a move into a SW Florida condominium or townhome (yes, they’re different—more on that later).

Move from Single Family Home to SW Florida Townhome/CondoSeveral factors combine to make that choice worth looking into. One is demographic: SW Florida homeowners approaching retirement age typically discover that much of the effort and expense of operating a larger home plant is being wasted once children are no longer at home. Given the choice between mowing the lawn and golfing, or vacuuming a largely unused game room or visiting the mall, eventually the decision gets clearer. Because downsizing can mean significant savings in time and money, checking out the current SW Florida condo/townhome choices can make a lot more sense than it ever did before.

The differences between condos and townhomes vary, although townhomes are usually considered to be the more similar to a single family home—with the notable exception that they are designed in a group, with walls shared. Most townhomes have two or more stories, but unlike condos, do not have units above or below.Move from Single Family Home to SW Florida Townhome/Condo

In most townhome situations, the owner owns the land the townhome is built upon, as well as the land in front and behind. Because most condominiums have neighboring units above and below—and sometimes on either side, like apartment complexes—land ownership is not part of the package.

In both types of arrangements, maintenance obligations are shared, with monthly fees apportioned at set rates, and associations in charge of oversight. Fees usually Move from Single Family Home to SW Florida Townhome/Condoinclude garbage pickup, lawn and garden upkeep, exterior insurance, roof and siding maintenance, etc. Owners are responsible for insuring the inside of their unit, including belongings. Because so many upkeep expenses are shared, the economies of scale tend to make condo and townhome maintenance expenditures less costly than single family homeowners experience—and being suddenly freed from the feeling of sole responsibility can come as a major relief! For the eco-conscious, a certain amount of self back-patting might be in order—even though some of today’s  SW Florida townhomes are actually as spacious as many single family dwellings.

Move from Single Family Home to SW Florida Townhome/Condo. The move from single family home to a SW Florida townhome or condo can make for a truly dramatic adjustment in lifestyle—or simply be a reflection of a change already under way. If such a move could be in your future, this winter finds a number of possibilities for you to explore. Give me a phone call if you’d like to take a look!