Monday, July 30, 2012
Dollars and Sense: Why You Should Consider Refinancing
With interest rates at historic lows, it is smart for anyone without a very low rate to talk to their mortgage lender about refinancing. To give you an example of the money you could save, let's say a woman took out a 30-year fixed rate $750,000 loan in 2007 at 7.36 percent. Her monthly payment would have been $5,172. If she refinanced in August 2010 at 5.29 percent, her payment would have fallen to $4,033. If she refinanced again in July 2012 at 4.29 percent, her payment would be $3,483, which is just 67 percent of her original payment. Assuming she lives in the home for the entire 30-year term of her mortgage, refinancing twice will save her $349,600!!!
Should You Stage Your Home?
Staging a home has been a popular practice in real estate, particularly in luxury real estate, for many years. By now many people know the basics: keep the house clean, pare down the knickknacks, put away family photos. Yet so many of the homes I see are not styled to advantage and there is no excuse for that!
If you are trying to sell your home, think about it in terms of making an excellent first impression. When you go on a first date you make sure your outfit is clean, neat and flattering. You put some extra effort into your hair and make-up or maybe buy a new cologne. You think of some interesting things to say about yourself so the person will want to see you again. The same goes for your home. Below are my tips for staging your home yourself.
1. Always keep it clean and ready to be shown.
2. Put away your personal photos.
3. If you are a collector, put away your collections. It will be a lot of work to do but you'll have to do it anyway when you move. I just took clients to see a home owned by an antiques dealer- there was stuff everywhere! And my clients left the home with the impression that it lacked storage space and didn't have a good flow. That wasn't true, it had a lot of closets and a good flow, but not with all of those antiques laying around.
4. Many homes in Florida lack a first floor coat closet (Why??? We have jackets and umbrellas, too. Where are we supposed to put them?). Avoid pointing that out to potential buyers by not leaving your jackets, umbrellas, purses, briefcase and shoes laying around. Remember the old adage: out of sight, out of mind.
5. If you have a pet, please take her or him with you while the house is being shown. If that is not possible, crate them. It is not acceptable to leave them in the kitchen or the laundry room. Buyers are going to want to see those rooms and any buyer who doesn't feel comfortable around animals is not going to go into the room if your pet is in it. I was once in a house with clients in which a rambunctious dog had been left in the kitchen. None of us felt comfortable enough around the strange dog to look in the kitchen.
6. When I think about a well staged home, I think about a good hotel room. It is clean, decorated in a subtle way and makes you feel welcome. Aim to make your house feel that way.
7. Be willing to move your furniture around. Now that you are trying to sell, go for form over function. Put the furniture where it looks best, not where it is most useful.
8. If you have a small nook somewhere (like the top of a landing), turn it into an office by adding a small desk, a chair, a lamp and a few office supplies.
9. Got an empty room you don't use? Make it into a yoga room. Add a few yoga mats, some yoga props, some battery-operated candles and some diaphanous curtains. You've suddenly turned an unused room into a luxurious amenity.
10. If you have a pool that has seen better days, you can distract from the dated tile by placing some large hurricane lanterns around the pool, adding some flowering potted plants and cleaning your outdoor furniture. Want to even make it look more luxurious? Take a cue from a hotel. Place neatly rolled towels in a wicker basket and leave out a tray of sunscreen. If you want to take it even further, leave out a tray on a lounge chair with a newspaper or book, a carafe of water and a small vase with some flowers.
Below is an article on staging that shows some great before and after photos.
Staged
If you are trying to sell your home, think about it in terms of making an excellent first impression. When you go on a first date you make sure your outfit is clean, neat and flattering. You put some extra effort into your hair and make-up or maybe buy a new cologne. You think of some interesting things to say about yourself so the person will want to see you again. The same goes for your home. Below are my tips for staging your home yourself.
1. Always keep it clean and ready to be shown.
2. Put away your personal photos.
3. If you are a collector, put away your collections. It will be a lot of work to do but you'll have to do it anyway when you move. I just took clients to see a home owned by an antiques dealer- there was stuff everywhere! And my clients left the home with the impression that it lacked storage space and didn't have a good flow. That wasn't true, it had a lot of closets and a good flow, but not with all of those antiques laying around.
4. Many homes in Florida lack a first floor coat closet (Why??? We have jackets and umbrellas, too. Where are we supposed to put them?). Avoid pointing that out to potential buyers by not leaving your jackets, umbrellas, purses, briefcase and shoes laying around. Remember the old adage: out of sight, out of mind.
5. If you have a pet, please take her or him with you while the house is being shown. If that is not possible, crate them. It is not acceptable to leave them in the kitchen or the laundry room. Buyers are going to want to see those rooms and any buyer who doesn't feel comfortable around animals is not going to go into the room if your pet is in it. I was once in a house with clients in which a rambunctious dog had been left in the kitchen. None of us felt comfortable enough around the strange dog to look in the kitchen.
6. When I think about a well staged home, I think about a good hotel room. It is clean, decorated in a subtle way and makes you feel welcome. Aim to make your house feel that way.
7. Be willing to move your furniture around. Now that you are trying to sell, go for form over function. Put the furniture where it looks best, not where it is most useful.
8. If you have a small nook somewhere (like the top of a landing), turn it into an office by adding a small desk, a chair, a lamp and a few office supplies.
9. Got an empty room you don't use? Make it into a yoga room. Add a few yoga mats, some yoga props, some battery-operated candles and some diaphanous curtains. You've suddenly turned an unused room into a luxurious amenity.
10. If you have a pool that has seen better days, you can distract from the dated tile by placing some large hurricane lanterns around the pool, adding some flowering potted plants and cleaning your outdoor furniture. Want to even make it look more luxurious? Take a cue from a hotel. Place neatly rolled towels in a wicker basket and leave out a tray of sunscreen. If you want to take it even further, leave out a tray on a lounge chair with a newspaper or book, a carafe of water and a small vase with some flowers.
Below is an article on staging that shows some great before and after photos.
Staged
Tuesday, July 24, 2012
South Florida Home Values Increase
According to a Zillow report, home values in South Florida increased 6.5 percent in year-over-year comparisons during the second quarter of 2012. The report also projects an additional 6 percent increase by the middle of 2013. These findings rank South Florida second out of 150 metro areas measured by Zillow (trailing only Phoenix, which saw a 12 percent increase with a prediction of another 9.9 percent gain).
Zillow's index said that Palm Beach County's median home value was $145,000, an increase of 1.8 percent from a year ago (although West Palm Beach's decreased by .9 percent to $111,600). Jupiter's median home value rose 5.4 percent to $226,600 and Palm Beach Gardens recorded a 5.1 percent jump to $226,300.
These numbers are certainly influenced by the artificially low supply of available homes, which is due to homeowners who want to move but cannot afford to and to banks taking a long time to foreclose on properties and then not putting them back into the market right away. While some people might believe we have a second wave of foreclosures coming our way, so far the banks seem interested in alternative solutions, such a loan modification and short sales.
As far as the forecast for another 6 percent gain in home prices, I am skeptical. Certainly if supply continues to be restricted we'll see higher prices. But if the supply chain begins to function more normally, I don't anticipate that significant of a gain. Wages are not rising and unemployment is still a problem, which would mean the rise in home prices seriously outpaced people's ability to purchase a home.
Interested in seeing more of the metro areas reported by Zillow? Click on the below link.
Zillow Report
Zillow's index said that Palm Beach County's median home value was $145,000, an increase of 1.8 percent from a year ago (although West Palm Beach's decreased by .9 percent to $111,600). Jupiter's median home value rose 5.4 percent to $226,600 and Palm Beach Gardens recorded a 5.1 percent jump to $226,300.
These numbers are certainly influenced by the artificially low supply of available homes, which is due to homeowners who want to move but cannot afford to and to banks taking a long time to foreclose on properties and then not putting them back into the market right away. While some people might believe we have a second wave of foreclosures coming our way, so far the banks seem interested in alternative solutions, such a loan modification and short sales.
As far as the forecast for another 6 percent gain in home prices, I am skeptical. Certainly if supply continues to be restricted we'll see higher prices. But if the supply chain begins to function more normally, I don't anticipate that significant of a gain. Wages are not rising and unemployment is still a problem, which would mean the rise in home prices seriously outpaced people's ability to purchase a home.
Interested in seeing more of the metro areas reported by Zillow? Click on the below link.
Zillow Report
Friday, July 20, 2012
New Condos in West Palm Beach
The First Baptist Church in West Palm Beach has signed a $23 million contract to sell a 3.2 acre lot that includes the Chapel By the Lake, the waterfront amphitheater just south of Okeechobee Blvd. The proposal for redeveloping the site includes two luxury condo towers (5,000 sf units with asking prices between $4 - $6 million) and an 85,000 sf medical office. The developers are Allan Adelson of Palm Beach Gardens and Golub & Co. of Chicago. The sale will not close until the city approves the proposal.
New Luxury Condos in West Palm Beach
New Luxury Condos in West Palm Beach
Redevelopment at President Country Club
An ambitious redevelopment is planned for part of President Country Club in West Palm Beach, which is under new ownership. The plan proposes extensive changes around the club's north course (called the Patriot course), which will include a five-story, 400-unit hotel; a 30,000 sf spa; a 30,000 sf clubhouse; 10,000 sf of medical offices; a 50,000 sf conference center; 100 single-family homes to be used as timeshares; 200 condos; pools and a tennis center. The proposal is for the project to be completed in phases, with the first phase being the construction of the hotel.
This property is quite close to the Palm Beach Mall, which itself is also facing redevelopment, supposedly into an outlet mall. If these two projects do come to fruition it will be a much needed boost to the Palm Beach Lake Boulevard corridor.
This property is quite close to the Palm Beach Mall, which itself is also facing redevelopment, supposedly into an outlet mall. If these two projects do come to fruition it will be a much needed boost to the Palm Beach Lake Boulevard corridor.
Thursday, July 19, 2012
More New Houses Being Built
Housing starts rose 6.9 percent in June from the previous month to a seasonally-adjusted annual rate of 760,000, according to the Commerce Department. That is the highest number since October 2008. Single-family housing starts increased for the fourth straight month and reached a two-year high.
Florida Real Estate By the Numbers
We have some great news for statewide sales! According to Florida Realtors Industry Data, there were 18,800 sales of exiting single-family homes, a 5.3 percent increase from June 2011. The median sales price rose 8.2 percent from a year ago to $151,000. As for condos and townhouses statewide, 9,202 units were sold in June, an increase of 1.5 percent from June 2011. The median price for those properties was $110,000, up a whopping 15.8 percent over the previous year!
To put that in perspective against those numbers nationally, according to the National Association of Realtors (NAR), in May 2012 the median sales price for existing single-family homes rose 7.7 percent to $182,900. The statewide median sales price for single-family existing homes in California was $312,110; in Maryland, it was $259,207; and in New York, it was $208,000. The national median existing condo price in May 2012 was $180,000.
To put that in perspective against those numbers nationally, according to the National Association of Realtors (NAR), in May 2012 the median sales price for existing single-family homes rose 7.7 percent to $182,900. The statewide median sales price for single-family existing homes in California was $312,110; in Maryland, it was $259,207; and in New York, it was $208,000. The national median existing condo price in May 2012 was $180,000.
How Do You Know It Is the Right Time for You to Buy?
There is a lot of talk in the real estate market about now being the time to buy; we've been hearing that for years. To dig deeper into the issue of when is the right time to buy, the question needs to be expanded to be specific to each buyer. When is the right time for you to buy?
Nationally prices have begun to stabilize. According to the Standard & Poor's/Case-Shiller Index, 16 of the 20 cities in tracks have not lost value this year. But just because prices are stabilizing does not mean that they will soon rise. Since history is a great indicator of future behavior, let's look at the real estate bubble from the 1980s- adjusted for inflation, it took the Index until 2000 to return to its 1989 peak. That real estate decline was not nearly as big as the decline we just had, so it is safe to assume that it is going to take 10 years or more for some of the markets to return to their 2005 peaks.
According to Harvard's Joint Center, 11 million homeowners have negative equity. Knowing that, you need to be reasonable about the feasibility of waiting for the market to rebound before you sell. Do you have ten years to wait? Do you want to put off a planned move because of your negative equity? No one can make that decision for you, but sometimes it is just best to take your lumps so you can move on to the next stage of your life. You need to understand the opportunity cost of waiting for the market to improve.
Before you say that is easier said than done, I have seen it work. I had a client whose home sold for 50% of what he paid for it five years earlier. As painful as that loss was, accepting it meant he could be transferred for his job to a city he liked much better. Even better, he no longer stresses about what he is going to do about his house. He took his loss and moved on.
Even if you take a loss on a home you sell, you could very well make it up on the next home you buy. Interest rates are at historic lows, so chances are that your new mortgage will have better terms than your current mortgage. With prices stabilizing you've got a good chance that your new home won't lose equity.
If you are a renter, the decision to buy should include consideration of the price-rent ratio, which is the cost to purchase a proprety divided by the annual rent. It measures how much the buyer is paying for each dollar of rent she receives. Historically speaking, 15 is the average ratio. Any number over 18 indicates the market is overpriced and a number under 12 indicates it is a good time to buy.
No one- not your parents, friends, reporters or even your real estate agent- can decide whether you should buy or sell. Since the privilege of making that decision is all yours, make sure you take into account not just the money but also your life goals.
Nationally prices have begun to stabilize. According to the Standard & Poor's/Case-Shiller Index, 16 of the 20 cities in tracks have not lost value this year. But just because prices are stabilizing does not mean that they will soon rise. Since history is a great indicator of future behavior, let's look at the real estate bubble from the 1980s- adjusted for inflation, it took the Index until 2000 to return to its 1989 peak. That real estate decline was not nearly as big as the decline we just had, so it is safe to assume that it is going to take 10 years or more for some of the markets to return to their 2005 peaks.
According to Harvard's Joint Center, 11 million homeowners have negative equity. Knowing that, you need to be reasonable about the feasibility of waiting for the market to rebound before you sell. Do you have ten years to wait? Do you want to put off a planned move because of your negative equity? No one can make that decision for you, but sometimes it is just best to take your lumps so you can move on to the next stage of your life. You need to understand the opportunity cost of waiting for the market to improve.
Before you say that is easier said than done, I have seen it work. I had a client whose home sold for 50% of what he paid for it five years earlier. As painful as that loss was, accepting it meant he could be transferred for his job to a city he liked much better. Even better, he no longer stresses about what he is going to do about his house. He took his loss and moved on.
Even if you take a loss on a home you sell, you could very well make it up on the next home you buy. Interest rates are at historic lows, so chances are that your new mortgage will have better terms than your current mortgage. With prices stabilizing you've got a good chance that your new home won't lose equity.
If you are a renter, the decision to buy should include consideration of the price-rent ratio, which is the cost to purchase a proprety divided by the annual rent. It measures how much the buyer is paying for each dollar of rent she receives. Historically speaking, 15 is the average ratio. Any number over 18 indicates the market is overpriced and a number under 12 indicates it is a good time to buy.
No one- not your parents, friends, reporters or even your real estate agent- can decide whether you should buy or sell. Since the privilege of making that decision is all yours, make sure you take into account not just the money but also your life goals.
Jumbo Loans
Jumbo loans, or nonconforming loans, are loans that exceed certain limits, like $625,500 in expensive markets. Those limits are set by Fannie Mae and Freddie Mac, who buy conforming loans and sell them to investors. During the economic contraction it because harder to get a jumbo loan but recent data suggests the jumbo loan market is coming back to life.
According to an article in the New York Times, one estimate is that the number of lenders making jumbo loans has increased 20 percent from 2009, when just a few banks were making them. In particular, there are competitive loans available in the $2 million range, where down payments can be 30 to 40 percent. In the first quarter of 2012, banks made $63.8 billion in jumbo loans, which was an 18 percent increase from the first quarter of 2011. According to Inside Mortgage Finance, jumbo loans were 16.8 percent of al loan originations, up from 9.9 percent for all four quarters of 2009.
Why the change? The jumbo market is dominated by wealthy individuals who generally have higher credit scores and higher down payments, which translates into less risk for the bank. Also, because the wealth among wealthy individuals can come from many different sources- a job or a trust fund, for example- the loans tend to me more uniquely tailored.
Jumbo Loans
According to an article in the New York Times, one estimate is that the number of lenders making jumbo loans has increased 20 percent from 2009, when just a few banks were making them. In particular, there are competitive loans available in the $2 million range, where down payments can be 30 to 40 percent. In the first quarter of 2012, banks made $63.8 billion in jumbo loans, which was an 18 percent increase from the first quarter of 2011. According to Inside Mortgage Finance, jumbo loans were 16.8 percent of al loan originations, up from 9.9 percent for all four quarters of 2009.
Why the change? The jumbo market is dominated by wealthy individuals who generally have higher credit scores and higher down payments, which translates into less risk for the bank. Also, because the wealth among wealthy individuals can come from many different sources- a job or a trust fund, for example- the loans tend to me more uniquely tailored.
Jumbo Loans
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