Changing gears, Steve wants to talk about an article in the New York Times about the explosion of rental units across the country. Terry mentions an uptick in the housing market and increasing home-ownership rates as millennials reach the age where they’re forming families and settling down. Even so, home-ownership is still below its historic norm of 65% and future growth could be slowed by rising interest rates and an overhaul of the tax code, which could take away the mortgage interest deduction on Federal taxes. Nov 15, 2017
Switching gears, Steve poses a listener’s question for the Real Estate Survival Guide segment, which asks if it’s wise to add a child’s name to older adults’ deeds. While this may seem like a good idea on the face of it, Terry believes it may not be all that wise. When you add an adult child to the deed, you’re also giving them permission to say “no” to selling your house, so if you need the money or decide you want to sell the house and travel, your child could refuse and that could be a problem. Nov 8, 2017
Steve wants to know what condominium owners can do if they’re living in a community that has a bad condo board. Terry facetiously (or perhaps not) recommends getting on the board yourself, which Steve likens to a fate worse than death! - Nov 1, 2017
Steve kicks off Real Estate Roundup by asking Terry Story if she’s heard of anybody buying a house using Bitcoin. Terry hasn’t, and Steve goes on to explain that Bitcoin is a new digital currency that’s basically created from a computer, so it’s bits and bytes, and doesn’t really have the backing of a government, gold reserves, or something else of surety or value. What makes it valuable is that there’s a limited quantity of bitcoins in circulation at any point in time, unlike traditional currencies where central banks can print as much as they want, devalue the currency, and trigger inflation. Bitcoins also come with inherent anonymity so their owners are shielded from the government’s prying eyes. 10-25-2017
Terry kicks off Real Estate Round-Up by quoting a recent Freddie Mac September 2017 Outlook Report on trends for the mortgage market in 2018. The report projects that new homes should be the primary driver of sales next year, with a two percent bump-up in total home sales from 2017 to 2018. Freddie Mac expects a moderate increase in mortgage interest rates in 2018 which, with a slight increase in housing supply, should reduce U.S. house price growth to about 4.9 percent in 2018, down from about 6.3 percent in 2017. 10-18-2017
Steve and Terry start Real Estate Round-Up by talking about home prices, which were up 5.6% over August 2016 to a median of $253,000 across the U.S., for the 66th straight month of year-over-year gains.
To emphasize how much this is a seller’s market, Terry shares a story where she listed a house for $350,000 right after Hurricane Irma and thought she wouldn’t get any calls. Instead, she got five offers, including one that was $10,000 over the asking price, all within one day of her listing the property! 10-11-2017
Steve starts this week’s Real Estate Round-Up by asking Terry Story for an update on existing home sales in her market of Boca Raton, FL. Terry says her phone started ringing almost immediately after Hurricane Irma, with previously registered sellers moving up their timetable to sell and others inquiring what their homes were worth, but Terry does not attribute that to Irma.
In the aftermath of other hurricanes—and Hurricane Andrew in particular—a lot of people moved from South Florida to northern parts of the state, and that exodus created a lot of new construction and new homes for sale, notes Steve. 10-04-2017
Switching topics, Steve wants to talk about a list, from Terry, of the nine things you should purge your home of before you move. Terry starts with getting rid of all the junk you’ve accumulated over the years such as bathroom towels that aren’t all that nice and that you really don’t use, old sheets and extra pillowcases, and appliances and kitchen gadgets that you really don’t need, such as rarely used juicers. Then go through the closets and take out all your unworn or incorrectly-sized clothes so someone else can use them, and throw out kitschy souvenirs, extra coffee mugs and old trophies that clutter-up your home. 09-28-2017
Due Diligence On Flipped Homes
Finally, Steve wants to know if buyers should scrutinize a flipped home the same way they’d analyze a rental car that’s for sale. His logic is that investors who know they’re going to flip the home in a few years don’t bother to take care of the home beyond outward cosmetic appearances, so buyers should dig even deeper on such sales.
Terry says a good place to start is by looking at whether the seller is an individual or an LLC (Limited Liability Corporation). That’s because investors often set up an LLC to purchase a foreclosed home. They then renovate the home, sell it, and liquidate the LLC. So, months later, if a buyer finds a defect in the property or the title, the LLC has no assets and is no longer in existence, so they have no one to go back to. However, if the LLC has been in existence for a long time, there’s probably less to worry about it. 9-20-2017
The Buzz About Tiny Homes
Steve changes gears to talk about “tiny homes” that have been in the news lately as people seek cheaper home buying options in a tight housing market and asks Terry about any hidden costs. Terry says one of the biggest expenses with a tiny home is the roughly $25,000 it could take to properly lay the foundation.
Tiny homes average about 400 square feet or less but are quite efficiently designed on the inside, even though the bathroom might be an outhouse. Steve mentions seeing a few tiny home layouts at the home furnishings store Ikea where everything, including the bathroom was there on display in a few hundred square feet of space, neatly packed and all figured out.
Tight Inventory Continues To Dog Housing Market
Steve starts his Real Estat Roundup segment by asking Terry how long a typical For Sale house stays on the market before it gets a confirmed buyer. Terry says the national average was 27 days for the month of May 2017, well below the 100+ days it took when the 2007 recession hit. She says Florida’s residential real estate market is a little sluggish, with homes on the market for 45 to 60 days because they are priced a little higher than the rest of the country and, therefore, take a little longer to sell.
The bottom-line is that the inventory of homes for sale continues to remain low, so homes are snapped up fairly quickly after they list, with buyers also eager to lock in low mortgage interest rates. She also holds baby-boomers responsible for the tight inventory because they are less willing to sell, are content with the homes they live in and, if they sell, typically downgrade to smaller homes where they compete with first-time home buyers.
Home Buyer’s Remorse
Steve starts Real Estate Roundup by asking Terry if she’s ever been in a situation where someone felt they’d bought the wrong house right after they bought it. Terry says it’s not uncommon to see buyer’s remorse kick-in as a delayed reaction when it sinks in that they’ve committed to spending a lot of money, but what she really tries to gauge is how serious that buyer’s remorse is.