Andy Weiser Fort Lauderdale Realtor Blog

Slim Chance of South Florida Home Prices Falling

New data shows that South Florida homeowners are in a good position with little to worry about for any decrease in home values.

A recent report by Arch Mortgage Insurance Company states that the likelihood of prices declining in Palm Beach County in the next two years is only a 3% chance. Broward and Miami-Dade counties along with 22 other areas in Florida have a mere 2% chance of price declines. To put things into perspective, the national average is 5%.

“I’m bullish,” said Ralph DeFranco, chief economist for Arch. “I think it’s a good time to buy. Interest rates are low, so buyers should lock in while they can.”

Many things are taken into consideration with the forecast that the Arch risk index report creates. They analyze things including median home prices from the Federal Housing Finance Agency while factoring in regional unemployment rates, affordability, change in population, housing starts and delinquent mortgages.

Palm Beach County based chief economist for the Metrostudy research firm, Brad Hunter, states he is not concerned with any part of the market either.

“One could easily make a strong case that prices will keep moving up, albeit at a slower pace,” he said. “I think it’s a single-digit probability that we see a real decline in home prices.”

Jack McCabe, another analyst in Deerfield Beach states that the strong demand and lack of supply of homes in lower price ranges will continue to nudge values of the luxury homes and condominiums higher.

A recent report by Ten-X, an online real estate marketplace in Irvine California listed the top real estate markets for this spring of 2016. Two Florida markets were in the top 5 with Palm Beach County coming in at fourth and Broward county being fifth. Ten-X used similar reporting methods based on home price increases, affordability and future demand based on local economic conditions.

“Florida, in general, seems to be doing really well,” said Rick Sharga, executive vice president of Ten-X. “Of the states that were hit hardest during the crash, Florida still has the most room to grow to get back to peak housing prices.”

4 Steps to Buying a Second Home

No matter what you are considering for a second home, it can be very exciting but it is also a large decision. Either a place to get away to on weekends or even a seasonal home to enjoy by the beach, here are some items to consider to see if a you are ready to make the move.

Affordability – Take a look at what homes cost that are in your area of interest and consider the monthly mortgage cost alone. Also, keep in mind that second home mortgages do come with a higher interest rate than your primary in case you are thinking of renting it out. Then factor in your additional expenses like insurance, taxes and regular utilities and maintenance. For single families, you may want to consider a property manager if you are not nearby or visiting often. Condominiums typically have association fees that will handle most of what needs to be done.

Location – Decide on a location that serves your needs all year round or often enough to make it worth owning. A beach location like Fort Lauderdale can be enjoyed throughout the entire year making it useful at any time that you can visit. Even if your usage is limited, selecting the right location can make renting it during the times you are away much easier.

Insurance – A good rule of thumb is to connect with your current insurance agent about the type of home you are considering. Begin the discussion with your current provider as they may offer you a better rate as an existing client. Consider things like flood zones or other hazard insurances that you may want to purchase.

Find your home and enjoy the benefits – Once you have done your due diligence and established your comfortable budget, then comes the fun part, finding your dream home and enjoying the benefits. After you have found your home and completed the purchase, it is time to enjoy it! You will soon discover the many advantages of having this home away from home. Not only is it yours, but it can also be cost effective in comparison to expensive hotels or rentals. Also, it is your home so it is always available and with no crowds. Finally, if you keep your home long term, you are building equity and also may have the option of renting it as well for additional income.

Your vacation home should be your oasis – a place to getaway, relax and fully enjoy your life in.

How to Invest Your Tax Return in Your Home

The spring brings us an exciting season, great weather and for some of us a tax refund check from the IRS. What are some of the best ways that you can spend that money? Investing these funds back into your home can not only provide you with some instant gratification, but can also add value to your home that can pay off when it comes time to sell.

According to research teams from the National Association of Realtors and Realtor Magazine there are many great ideas to make the best of these bonus funds. The result of their findings show which property enhancements offered the best return on investment. Here were their best performing projects.

Front Door – Updating that tired or worn front door with an architecturally stimulating new one can not only boost your home’s curb appeal, but it can also increase energy efficiency and safety. A new steel entry door on average costs just over $1,100 but has a ROI of over 96%.

Garage Door – In the same interest of exterior doors, replacing old garage doors with a modern one will cost on average about $1,500 and has an ROI of over 83%. Garages are often a highly sought after amenity that has a big impact on the aesthetics of your home so this is a great investment to consider.

Windows – Last, but not least for the appearance of your home’s exterior would be the importance of high quality, high impact windows. New, energy efficient and high impact windows will cut down on your monthly energy costs, potentially your insurance bill and can sometimes earn you tax credits with select models. Replacing windows high impact windows can often see between an 80-86% ROI.

Deck – Decks can provide a great platform for outdoor entertainment and enjoyment.  A 16 foot by 20 foot deck will cost on average about $9,500 but you will gain an 87.4% return on it upon resale. For those who already have a deck, consider improving it with a fresh coat of paint or stain, adding a bench or installing screening.

Update Your Kitchen – Kitchens are one of the most important rooms as they are one of the biggest focal points in every home. Having a modern kitchen can substantially add value to your home as a result. The good news is you don’t always have to gut your kitchen down to the studs to add great value. Sometimes you can keep your existing cabinets but replace the doors and drawers. Add new energy efficient appliances, new sink and countertops and you will have made a big improvement for significantly less than a full remodel. This type of mid-range remodel can yield an estimated 82% ROI.

Finally, if you are interested in another great financial move but don’t want to deal with a project, consider making one extra mortgage payment per year applied to your mortgage principal. This can substantially reduce your overall debt. In fact, one extra mortgage payment per year brings the lifespan of a 30 year mortgage down to 22 years. Make this even more budget friendly and spread that payment over 12 months by paying 1/12th per month.

A look into this year’s real estate market

Last year in 2015 we had seen some of the best statistics in years for the real estate market. A further increase in the number of sales along with an increase in the average sale price of homes showed that there was a lot of positive activity in the economy. So what is in store for 2016? We are just entering spring and signs are showing that we are trending towards a more “normal” real estate market. Let’s take a closer look at the details and forecast that Realtor.com has provided.

The source of Demand: Last year in 2015 we had seen Millennials making up a significant portion of the buyers that were active. Realtor.com had reported that Millennials accounted for nearly 2 million sales which translates into nearly ⅓ of all transactions for 2015. Forecasters project that this number will actually increase for 2016 due to the large group gaining more financial independence due to the improving economy.

Meanwhile, both Gen Xers and Baby Boomers will also be playing their part in the market. Gen Xers are will be looking to trade up to larger homes while the empty nesting Baby Boomers will be downsizing and heading to more urban areas in search of an active lifestyle for their retirement.

New Construction: As the demand has not decreased and the inventory is still tight, more building has been taking place to satisfy the need. A strong economy with credit access remaining attainable will help first-time home buyers. Builders are recognizing the size of this large group of buyers and are planning to develop the inventory to match the demand. Some of the developments that were started years ago or put on hold will also be coming to fruition as the market sustains its momentum and remains robust.

Mortgage Rates: Mortgage rates were supposed to increase last year in which they did, but they also had their dips. This year rates are expected to have a similar following with the year finishing out with a rate slightly higher than that of today. The increase will surely add an increase to the average monthly mortgage payment, yet the extra cost should not be substantial enough to hinder any buyers from entering the market.

A Normal Market: Years ago before our most recent recession supply and demand were somewhat in line with each other. In the past 10 or so years there have been some dramatic highs and lows as our economy has been adjusting. Today, many of the distressed properties have been swallowed up by buyers and new construction has been increasing. As this trend continues prices should also follow by showing a more “normal” progression in their increases.

Rental Activity: Currently, more than 85% of the United States have rents that exceed 30% of the income of renting households. With statistics like these, it has become more affordable to buy in more than three-quarters of the U.S than rent. Until we see rents stabilizing or more inventory is made available at lower rates, buying will be a more attractive option this year.

South Florida Home Sales Show Solid Growth for 2015

Both home sales and prices were on the rise in the South Florida housing market in 2015. Despite a small dip in the fourth quarter slowing its momentum heading into 2016, the overall market has performed well showing many signs of good health.

The Florida Realtors shared that 49,238 existing single family homes were sold in the tri-county region last year which was up nearly 10% from the year prior. The median sales price also was up by 6.4% at $282,000. Sales isolated to just the 4th quarter were up by 1.6%.

South Florida growth was faster compared to the rest of the state. Florida had 274,769 single-family home sales in 2015, a 12.4 percent increase, while the median sales price rose 10.1 percent to $196,000.

In the condo market, South Florida had 47,173 sales of existing units in 2015 which was a 1.8% increase. The median sales price also grew by nearly 7% up to $154,900. The fourth quarter showed a small decline in sales. Cash deals have been decreasing due to REO’s drying up in supply along with the number of foreign buyers thinning as the U.S. dollar has been gaining value.

Statewide the condo market has been performing well. There were 114,969 sales of condos in 2015 which was a 6.1% increase from the year prior. The median sales price also increased by 7.1% to $150,000.

“In each of the first three quarters of 2015, we observed double-digit percentage increases in [single-family home] sales on a year-over-year basis,” Florida Realtors Chief Economist Dr. Brad O’Connor said. “Year-over-year growth in 2015’s final quarter was more subdued, signaling a possible return in 2016 to more stable rates of sales growth. We expect home prices, on the other hand, to continue to rise at an elevated pace in 2016, as much of the state is in the midst of an inventory shortage that is likely to persist throughout the year.”

Whether you are planning to buy or sell 2016 shows to be a great year to make a real estate move.

Home Prices Increase Yet Buyers Stand Their Ground

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The prices of homes have been on the rise as we enter 2016 but buyers have been taking a closer look at what they are willing to pay.

In both Broward and Palm Beach counties, single family homes hit a median price of $285,000 per local Realtor boards. Prices were up annually by 8% in Broward county and 4% in Palm Beach county while closed sales also experienced increases by 7% in Palm Beach and 6% in Broward.

Inventory still remains tight with fewer homes on the market in South Florida. The low supply typically would give sellers more power, yet a slight shift in the market has been seen as buyers are resisting overpriced homes. Sellers have become accustomed to the lack of homes for sale and were trying to leverage this by setting the price of their home slightly higher as a result.

The resistance is causing for a shift towards more of a normalcy in the marketplace and a “gradual rebalancing.” Although average days on market for a home in Palm Beach County was down to 44 days from 52 a year ago, that is still a higher level since last spring. Broward county inched its way up to 59 days up from 49 according to the Greater Fort Lauderdale Realtors Association.

The general consensus by local realtors is that homes that are priced correctly are selling in approximately 30 to 45 days. If you price your home right, there are plenty of buyers out there. However, if you are priced too high, buyers are becoming savvy enough to decipher that and your home may sit on the market and become stale. The longer that a home stays on the market, typically the lower the sale price. It is also shared that there is still a healthy demand by buyers, yet there are signs showing of more “normal” market conditions.

The tri-county South Florida region ranks sixth nationwide among the top markets for buyers, according to a report released Tuesday by the Zillow.com real estate website. Philadelphia, Chicago, Baltimore, Hartford, Conn., and New York are the top five.