Real Estate Survival Guide with Terry Story

Aug. 9th - Think Outside The Box To Win In Today’s Tight Housing Market

Think Outside The Box

Steve comments that financing creativity has always been a hallmark of real estate deals, with seller financing in vogue when interest rates were ridiculously high and freebies such as cars and boats being offered to motivate buyers.  He talks about a neighbor who was moving and needed to buy a house but knew she was competing against another buyer.  So, she wrote a very nice letter to the seller and had her offer accepted.  Terry talks of sellers becoming emotionally attached to the home because they have lived in that house for years, have raised families there, have fond memories in most cases, and are emotionally attached to the home.  As a result, they’d like to sell it to someone who appreciates the home and will care for it. Steve urges buyers to understand a seller’s history with the house and see if there are ways in which your offer can get an edge through simple things such as the letter his neighbor wrote—a classy case of thinking out of the box and turning a competitive situation to your advantage in a warm way.

Aug. 2nd - What To Do If Your Neighbor’s Airbnb Starts Spinning Out Of Control

Airbnb Is Great, But Not In My Backyard

Steve opens this week’s Real Estate Roundup with the pros and cons of Airbnb, the leading online marketplace for vacation and home rentals.  Terry opines that Airbnb is wonderfully convenient if you, as a renter, are looking for fantastic short-term stays in great neighborhoods or convenient low-cost vacation rental options that give you the feel of home.  But, she continues, people get a little testy when asked, “Would you like an Airbnb in the neighborhood?”  Generally, people in residential neighborhoods do not like the idea of neighbors renting their homes for short periods to itinerant guests from all parts of the world, who come and go as they please.  As Steve puts it, Airbnb is fine but “not in my backyard.”

July 26th - Even Steep Discounts Aren’t Reviving The Sale Of Luxury Homes

Pending home sales dipped in January 2017, a state of affairs which Terry attributes to an imbalance between supply and demand in the housing market.  Housing inventory is less than 6 months, which means, in theory, that if no new sellers added their homes to this inventory, all available supply would be sold in less than 6 months.  This sub-6 month supply, incidentally, is the criteria for using the term “seller’s market,” and that is certainly the case in locations across the country today. Terry notes that roughly only 20% of homes that hit the market sell in a timely fashion, and the remainder – which fail to sell because they’re too expensive or unattractive for other reasons – constitute the bulk of the unsold inventory.

July 19th - America’s Affordable Housing Crisis Just Got Worse In 2017 ~ VIDEO

Affordibility Crisis 

Steve kicks off the show with some good-humored banter about Terry’s six-seater golf cart that she’s been driving around her neighborhood and giving people rides in, for free.  Then, getting serious, Steve turns to an article that says some housing markets are reaching crisis levels for affordability.  Terry confirms this with data on America’s affordable housing crisis that shows a 7% annual drop in national inventory for homes priced below $100,000, making home purchases harder for lower income buyers.  She also cites a 2% inventory increase in homes in the $100,000 – $200,000 range, a 20% increase in homes in the $500,000 – $1 million range, and a 30% increase in homes above the million-dollar mark.  So if you’re looking for a luxury home—anything that lists for over $1 million—now’s a good time to buy because there is a lot of inventory in that price range.

July 12th - It’s a Seller’s Market for Now, But Things Could “Flip”

We Are In A Seller’s Market For Now, But That Could Change

Steve starts the show by asking Terry to shed light on a prediction he saw that said we’re in a seller’s market in housing right now and that the next buyer’s market is two to three years away.  Terry attributes that prediction to an economist at the real estate website Zillow and explains it as an inference that rising interest rates over the next few years could restrict the number of buyers and force home prices down.  She also sees this as part of the cyclical nature of the housing market, where the trend gradually turns from a seller’s market to a buyer’s market, with a tipping point that begins when home price appreciation slows and favors home buyers, not sellers.

This flip could also occur due to a supply-demand imbalance as more homes get on the market due to overbuilding or from a price reduction trend started by sellers tired of waiting to sell their homes and buyers holding off on purchases in anticipation of lower prices.

Over the past few years, home price growth had outpaced tepid income growth and prompted mortgage lending giant, Fannie Mae, to raise its debt-to-income ceiling from 45% to 50% allowing people with good credit to qualify for mortgages by taking on that little bit of extra debt.

July 5th - Increase In Fannie Mae’s Debt To Income Ceiling Should Make Your Next House Easier To Buy

Fannie Mae Ups Its Debt To Income Ceiling By 5%

This week’s Real Estate Round-Up starts with a discussion about Fannie Mae, the big, government-sponsored financing giant, raising its debt-to-income ceiling from 45% to 50% in July.  The debt-to-income ceiling, explains Terry, is the ratio of your total debt (mortgage, auto loans, student loans, credit cards, etc.) divided by your gross income, expressed as a percentage.  By raising this ceiling, Fannie Mae gives borrowers a bit more wiggle room on the amount of debt-related payments they can take on.  So home buyers, for example, can now have up to 50% of their income tied to various loans, including housing.  As a result, says Steve, they’ve got to pay taxes and manage their living expenses (grocery, gas, clothing, insurance, etc.) out of the remaining 50%, which doesn’t leave a whole lot of room for savings and investment.

Terry also says people should not be alarmed by this because, before raising the debt-to-income ceiling, Fannie Mae did some research and found that a significant number of these borrowers have good credit and were not prone to default.  So they’re not reckless; they just have higher debt because incomes aren’t rising that fast while the cost of housing, in particular, is going up.  So upping the ceiling gives more people access to home buying but, Steve cautions, borrowers must be careful to not overextend themselves and have no money left over for savings and the long-term.

June 28th - Why Are Millennials Buying Homes Rather Than Renting Them?

Q1 2017: Household Formation Up, Millennials Entering Market

Millennials are entering the housing market in greater numbers, and this is a positive sign on several levels.  In the first quarter of 2017, new household formations occurred at double the rate of new renter households.  “New household formation” refers to first-time home buyers.  Terry remarks that the home ownership rate nationwide was at 70% before the “great recession,” which bottomed out around 2011, and has been slowly recovering to the 64% rate it’s at today.  Millennials are key to the continued revival of the housing market, and these household formation numbers are an encouraging sign that this demographic is embracing homeownership and successfully buying their first homes.

June 21st - How Will Eliminating The Property Tax Deduction Affect You?

On today’s “Real Estate Round-Up” talk with Terry Story, topics include possible changes to mortgage tax deduction laws, saving up for a down payment on the new home you want to buy, and the limitations of online home value estimator tools.  There has been rampant speculation in the real estate industry and elsewhere over comments from the Trump administration about nearly doubling the standard deduction for mortgage and interest payments (from $12,600 to $24,000) while simultaneously eliminating deductions for state and local taxes including property taxes.  It’s the latter issue, canceling the ability to deduct costly state and local taxes from your federal income taxes, that is generating a lot of heat and angst.  The rationale for the deduction has been that the government can’t “double tax” you on the value of your property but, evidently, that may be rolled back.

June 15th - It’s Hurricane Season Again! Do You Have The Right Insurance?

Hurricane & Natural Disaster Insurance For Your Home

Hurricane season started on June 1 and it’s a good time to review your home owner’s insurance or specific policies covering natural disasters.   It’s imperative to understand what kind of coverage you have and what your premiums and deductibles are.  For folks living in hurricane-prone states, you should look at your windstorm deductibles, flood insurance deductibles (if you have coverage at all under a state-subsidized plan), and premiums.  Many people opt for a low deductible, but this is generally too expensive in light of the benefits it provides.  You should not need insurance to cover a loss in the low thousand dollars.  Insurance should generally not be thought of as a way to manage maintenance and wear-and-tear kind of expenses.  A higher deductible will lower your premium and, in most cases, offer you all the coverage you’d need for a major disaster.  Granted, some people will have a hard time paying off a high deductible, but this is a good use of the emergency fund you should have.  Those lower premiums will save you a lot of money in the long run, whether disaster strikes or not.

June 7th - The Stress Of Moving Is Keeping People At Home

The Stress Of Moving Is Keeping People At Home

Today’s conversation with Terry begins with the topic of the stress of moving.  By way of a bit of context, Terry notes first that 65% of movers do so between Memorial Day and Labor Day and, secondly that research has shown that Americans move about 6 times in their life.  Evidently, that number may be dropping as a good many people find moving to be as stressful as a death in the family or planning a wedding.  The result is that a lot of people nowadays are simply opting to not move and, of course, that means not buying or selling a property.  Terry admits that it often feels as though real estate pros like herself are used as punching bags by their clients who are just looking to unload their stress on someone.

May 31st - Low Housing Inventory Is Frustrating Would Be Buyers

Low Housing Inventory in 2017 Causes Market Gears to Grind to a Near Halt

Steve and Terry have been talking for years about how the low inventory of homes available for purchase is affecting prices, demand, and rents. They pick up this topic again, focusing today on the reluctance of home sellers to move.  Many homeowners want to sell but, just like the would-be buyers, they have few good options on where to move.  They look at some of the underlying issues feeding the current holding pattern the market is stuck in.

May 24th - Looking For A Retreat? How About Vero Beach?

Vero Beach Offers Quiet Retreat From Busy South Florida

On the docket today Steve and Terry chat about the quiet beach town of Vero Beach, Florida, issues that frequently come up with flipped properties, renter fees versus deposits, and landlord’s insurance.  Vero Beach is an hour north of South Florida, and in many ways offers a contrast to the hectic pace and crowds found in the urban/suburban sprawl that stretches from Palm Beach to Miami.  Terry describes Vero Beach as a very nice community, quieter and more seasonal than South Florida, and one where nobody lives more than 15 minutes from the beach.  Many people from Fort Lauderdale and surrounding towns drive up to Vero Beach for a leisurely retreat from the hustle and bustle.

One difference South Floridians will notice right away is how much easier it is to get access to the beach in Vero Beach.  The area also contains abundant natural beauty, from the coast to the Indian River “lagoon” which the Intracoastal Waterway flows through.  Other perks include numerous restaurants and golf courses.  The luxury community of John Island offers a more exclusive experience for those who can afford it.