Archive for the ‘Homes in Central Florida’ Category

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What is a Housing Bubble? Is One Forming?

July 7, 2015

Bubble-2-KCM

The recent talk of Greece and its financial challenges has some questioning whether the U.S. could also return to the crisis we experienced in 2008. Some are looking at the rise in real estate values and wondering whether we are in the middle of another housing price bubble.

What actually is a price bubble?

Here is the definition according to Jack M. Guttentag, Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania:

“A price bubble is a rise in price based on the expectation that the price will rise. Sooner or later something happens to erode confidence in continued price increases, at which point the bubble bursts and prices drop. What makes it a price bubble is that the cause of the price increase is an expectation that the price will increase, which sooner or later must reverse itself.”

Does Professor Guttentag believe we are in another housing bubble?

In a recent article, he explained:

“My view is that we are a long way from another house price bubble. Home buyers, lenders, investors and regulators now understand that a nationwide decline in house prices is possible — because we recently lived through one.”

What are home prices doing?

Though home values are continuing to appreciate, the acceleration of the increases has slowed to year-over-year numbers which reflect a healthy housing market. Here is a chart showing year-over-year appreciation since January of last year:

Case-Shiller

We can see that appreciation rates have dropped from double digit numbers to more normal rates of 5% or lower.

Bottom Line

We think Nick Timiraos of the Wall Street Journal put it best in a recent tweet:

“Predictions of a new national home price bubble look unfounded for now, according to data.”

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217,726 Reasons to Buy a Home Now!

June 10, 2015

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The inaugural Opportunity Cost Report was released recently by realtor.com. The report explained that “with interest rates and home prices expected to climb in the next year, the financial penalties of delaying or forgoing a home purchase in today’s market have become very steep”.

The report estimates that, based on today’s dollars, the average purchaser would accumulate $217,726 in increased wealth over a 30-year period.

(You can get the projected wealth increase for almost 100 metros here.)

What could this mean to someone sitting on the fence waiting to buy?

Experts believe that both home prices and mortgage interest rates will increase over the next twelve months. Obviously, if this does happen, the monthly cost of a home a year from now will be dramatically higher than it is today. The Opportunity Cost Reportbreaks down exactly how much a purchaser could lose over increments of one year and three years. Here are the results based on an average purchaser in the U.S. delaying their purchase:

The Cost of Waiting to Buy | Keeping Current Matters

Bottom Line

If you are ready, willing and able to buy a home, waiting doesn’t make sense.

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2 Out of 3 Renters Want to Own. What’s Stopping Them?

June 9, 2015

Want-to-Buy-KCM

The Federal Reserve Bank of New York recently released the 2015 SCE Housing Survey. The survey revealed that most current renters would prefer owning and that 61.9% of them plan to buy a home within the next five years.

68.3% stated they would prefer owning (with 45.6% saying they ‘strongly’ prefer owning). When asked at what point in the future do they think they will own a primary residence:

  • 8.2% said within a year
  • 15.3% said in 1 to 2 years
  • 38.4% said between 3 to 5 years

What’s Holding Them Back?

Of the 68.3% who would prefer to own, 2 out of 3 cited difficulty in getting a mortgage for the reason they do not own. However, many believe that the reason so many think that it would be difficult to get a mortgage is not fully based on current market realities.

For example, studies have shown that there is confusion over the amount of money needed for a down payment. Research has shown that 40 to 50% of Americans believe that between 15-20% is the minimum required for a down payment. In reality, there are many programs available at 5% and even 3%. There are even some programs that don’t require any down payment (ex. VA loans).

Others fear they need a perfect credit score or believe that the overall mortgaging process has become almost impossible. Actually, the Mortgage Credit Availability Index, a report from the Mortgage Bankers Association, has shown that, over the last seven months, access to mortgages has gotten much more available.

And the NY Fed study suggests that some renters are waiting for interest mortgage rates to fall even further. Fifty percent of the renters surveyed believe mortgage interest rates will fall over the next year and almost 10% believe that they will fall by more than 1%. However, the reality of the situation is that Freddie Mac, the Mortgage Bankers Association and the National Association of Realtors are all projecting that rates will be significantly higher at this time next year. They are all predicting mortgage rates will be almost 1% higher!

Bottom Line

Many renters want to own their own home. Some are not moving forward based on misunderstandings regarding the mortgage process. If you are currently a renter who desires the benefits of homeownership, sit down with a local real estate professional to determine what your options actually are.

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Holy cow – there are no homes to sell…

January 30, 2013

house sideways

Things have gotten a wee bit strange in real estate recently. There are simply too few homes for sale. I have buyers…lots of buyers actually but there is an absolutely nothing to show them. If you want a home in the $200,000 to $350,000 price range in a good area of Orlando then you had better be prepared to look a long time and jump on something the minute it becomes available. I’m seeing multiple offers on homes listed and anxious agents who want contracts signed before it is too late. There is definitely a sense of urgency in the Orlando real estate marketplace.

What does this mean? The economy is affecting homes listed for sale as potential sellers fear they won’t obtain fair market value for their home. The majority of homes for sale in Orlando remain short sales or foreclosures. We need to see the inventory of distress sales dwindle and more normal market conditions return.

What is normal? Who knows? But this certainly isn’t it.

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Cash is KING for real estate & other random real estate thoughts.

August 24, 2012

This may be a wild and wooly post but I’m just going to share whatever is on my mind today:

What in the world is going on in real estate in Orlando? I’m glad you asked. It’s a rather unique market right now with super low inventory of homes for sale and still lots and lots of distressed properties on the market. Not as many foreclosures but a lot more short sales.

I am seeing multiple bids on homes that are in move-in condition. I listed and sold a home in ONE day recently that was located in Winter Park and was completely remodeled. We had a bidding war and over 20 showings in two days. Absolute madness. What this tells me is that there are so few homes available that are in pristine condition that people will swarm over the good homes for sale. Note to Sellers: FIX YOUR HOUSE UP and make it shine. It paid off for my Sellers in a BIG way.

I recently had a chance to speak with an appraiser (yes…he actually spoke to me) and he told me that 8 out of 10 homes he appraises are fixed up and renovated. He hasn’t appraised a dumpy house in a long time. It is interesting to note that most people are looking for that type of home. After buying a home with 20% down, there isn’t a whole lot of extra cash leftover to fix up the home. So have your home in beautiful condition and watch the offers come in.

There are still distressed homes for sale and while lenders are putting lipstick on these pigs (i.e. paint and carpet)…they are still often showing signs of neglect. The interesting thing is that people are still bidding high on foreclosed homes. I am not sure what is going on here because who wants to OVERPAY for a home anymore? Have buyers lost their minds? Foreclosures are NOT a “deal” at the moment.

Finally, investors are still out there trying to work creative financing and get all sorts of hinky transactions closed. Flippers are back. I won’t deal with anything that may appear unethical and some of these deals just don’t seem “right” to me. Best to move forward with buyers who are working the deal with integrity. That is not to say that investors are not ethical…I just have not felt comfortable with the ones that have approached me lately.

Finally, CASH is KING. If you want to guarantee your offer will be accepted, I hope you are lucky to have cash. People know that the mortgage process is still dicey with resulting delays as things move through underwriting. If you have CASH…you have a guaranteed deal once you pass the inspection phases.

That’s real estate in a nutshell for Orlando…things are moving and selling but we have precious little homes available for sale. If you want TOP DOLLAR for your house – now is the time. I have not seen prices this good in a long time. Let’s get selling…

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Home Decorating – What’s in?

March 3, 2011

An interesting thing is happening in the world of real estate and home decorating. Everything old is new again. 

I am finding in this time of economic uncertainty that people are decorating their homes differently. I am seeing a lot of natural looking furniture, distressed pieces, color…in short an updated cottage style. COTTAGE is huge right now – you only have to look at the magazines on the racks to see that this look for home decorating is hot and here to stay. 

I think the trend toward this well defined look is a desire to feel AT HOME in our homes. I think it is an effort to buy something (affordable) and that makes us feel like we are back in grandma’s kitchen. This style of decorating is not about matching furniture and brown tones. It’s about COLOR and lace and older pieces of furniture that have been repurposed. You can call it a move toward green living or just call it a desire to save some green by buying gently loved furniture but cottage-style living is here to stay. 

Personally – I like it. The home with a cottage look has some personality. I like color. Pink is in and yellows, greens and blues are back. I love it – I think it is a decorating reminder that our house is our home and we need to make it look so. For many, it reminds us of sitting in our family kitchen and feeling the love. A house is not just bricks and mortar – it’s a place where families still eat around a dinner table and use tablecloths and laugh. It’s living life in a gentle and loving style.

For the record, I’m seeing this style in all price ranges. People are getting very creative and it’s all in the details. Chandeliers in bathrooms, walls in pink and blue, gentle loved and often scratched tables, lots of white. It’s all very interesting and intriguing.

Think outside the box and go bold. Start with color – you will be amazed how it will lift your spirits.

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New South Orlando Listing

December 17, 2010

Downtown Orlando – LAKEFRONT – three buildable lots or renovate home. Wonderful opportunity!

 http://www.realtor.com/realestateandhomes-detail/1808-Baylarian-Boulevard_Orlando_FL_32806_M56034-59641