Nov. 28, 2017

What do buyers dislike about a neighborhood?

Sunshine State Survey from the University of South Florida asked respondents to judge the livability of their own neighborhood and what would deter someone from moving in. It also asked them to predict what the neighborhood will be like in five years, according to Susan A. MacManus, project director.

For the survey, each respondent answered a series of question including this one: "Some community leaders are worried about having enough people to live and fill job openings in their communities. If someone you knew was considering a move, would any of the following keep them from choosing to move to your community? Would ___ be a big problem, somewhat of a problem, or not a problem?"

Respondents were asked to rate 10 possible deterrents listed here in order of concern:

Traffic congestion. Nearly three-quarters of Floridians feel the pain of traffic congestion: 72 percent feel that traffic jams are "somewhat of a problem" or worse, with over a third (34 percent) saying that congestion is "a big problem." There is some indication that the problem is getting worse as the economy improves and more people move to Florida. Those most likely to identify congestion as a big deterrent to in-migration are unemployed workers (40 percent), full-time workers (39 percent), persons of prime working age— ages 35 to 54 (40 percent), Hispanics (40 percent), and those with higher household incomes, who are more likely to live in suburbs (41 percent).

Cost of buying a home. Seven-in-ten Floridians say that the cost of buying a home would be a problem for someone considering moving into their community. These concerns track with rising home prices in the state – up 30 percent across most markets, according to some estimates. Younger Floridians are more likely than older Floridians to say that the cost of buying a home would be a problem for someone considering moving to their community: 76 percent of those ages 18 to 34, compared with 62 percent of those ages 80 and older. Three-fourths of black (75 percent) and Hispanic (77 percent) respondents say that the cost of buying a home is a deterrent to potential newcomers, compared with 65 percent of whites.

Those living in a household earning $75,000 or more are more likely to say that the cost of buying a house would be a problem for someone considering a move to their community (74 percent), perhaps because of a greater awareness of the costs of homeownership (as they are more likely to own a home) or the escalation in property values in their neighborhood.

Rental housing costs. About 70 percent of Floridians identify the cost of rental housing as a possible deterrent to potential residents of their community – 29 percent say it's a big problem, while another 40 percent say it is somewhat of a problem. With population steadily growing in the state and more upper-income residents choosing to rent rather than buy, the demand for rental housing is outstripping availability, and new developments are increasingly tailored to high-end customers. Both trends drive up prices.

With rents rising most in Florida's largest and most diverse cities, residents from racial and ethnic minorities and younger Floridians are hit hardest. Thus, it is not surprising that rental housing costs are identified as an in-migration deterrent by a larger share of Hispanics (83 percent), those ages 18 to 34 (73 percent), and women (74 percent) – each lower wage earners, on average.

Availability of public transportation. Overall, two-thirds (67 percent) say that the availability of public transportation would be a problem for people considering moving into their community; 38 percent see it as a "big" problem – a higher share than for any other issue examined. More women (40 percent), Hispanics (42 percent), those not in the work force (47 percent), those with a household income of less than $35,000 (41 percent), older Floridians ages 55 to 64 (42 percent) and ages 65 to 79 (40 percent), and college graduates (41 percent) point to the lack of public transportation as a reason to deter future residents from moving in to the community.

Except for college graduates, the other demographic groups have larger shares of low income and/or disabled persons, less likely to drive and more likely to rely on public transit to get around.

Availability of affordable long-term health care. Sixty percent of Floridians say that accessing affordable long-term care would be a problem for someone considering a move into their community – either "big" (22 percent) or "somewhat" of a problem (38 percent). Among those most likely to say that long-term care affordability is "a big problem" are Baby Boomers (30 percent) and lower-income Floridians (30 percent). Boomers are more attentive to the costs of long-term care; while those with low incomes worry that neither they nor others in similar circumstances could afford long-term care in their community.

Commute time to work. A majority of Floridians (58 percent) say that commute times would be either a "big" problem (21 percent) or "somewhat" of a problem (37 percent). Those most likely to identify commute times as a "big" problem are Hispanics (27 percent), those ages 35 to 64, full-time workers (25 percent), those with a household income of at least $35,000 but less than $75,000 (26 percent), and college graduates (25 percent).

Access to quality health care. Floridians are split over whether access to quality health care would be a problem for someone considering a move into their community. Nearly equal shares say that access to quality health care would not be a problem (49 percent) as say that it would be a problem (48 percent)" somewhat of a problem" (31 percent), a "big problem" (17 percent).

Majorities of millennials (57 percent), blacks (61 percent), Hispanics (54 percent), part-time workers (53 percent), the unemployed (62 percent) or not working (58 percent), and lower-income (56 percent) Floridians say that healthcare access poses either "a big problem" or "somewhat of a problem" to potential newcomers. These gaps in opinion follow health insurance trends: 13 percent of Floridians are uninsured, and the uninsured are disproportionately young, poor and non-white. Floridians, especially in these groups, are more likely to work in low-skill service jobs, and many of their employers either do not offer health insurance or offer plans that are unaffordable for low-income people.

Quality of schools. People with a child in school are less likely to say that school quality would be a deterrent to future buyers than current residents without children (51 percent vs. 46 percent). So, too are wealthier individuals, who can better afford to choose locations with good schools than those with household incomes of $35,000-$74,999 (52 percent vs. 41 percent).

Public safety. A majority of Floridians do not see public safety problems as keeping someone from moving in to their community, but 39 percent do (7 percent view it as a "big problem" and 32 percent as "somewhat of a problem.") Even crime rate data send mixed signals. While both property and violent crime rates have halved in the state since 1996, both rates are still substantially higher than the national average.

Black (49 percent), Hispanic (50 percent), and low-income (47 percent) Floridians are most concerned about public safety. Minority Floridians are more likely to live in urban areas, where the number and rate of crimes tends to be higher, while low-income people tend to live in poorer communities, also with generally higher levels of crime.

Availability of public parks and recreation spaces. Few say that the availability of parks and recreation places would be a "big" problem (6 percent) or "somewhat" of a problem (19 percent) affecting a potential in-migrant's decision. A larger share of women (29 percent) and lower-income persons –household income below $35,000 (30 percent) – cite the availability of parks and recreation spaces as a negative in their community.

Women (mothers) are generally more aware of the location and condition of the parks around them. And previous research has found that poorer persons tend to live a greater distance from green spaces.

Nov. 20, 2017

Why aren’t more homeowners becoming sellers?

With a seller's market in many places across the country, why are so many homeowners reluctant to sell? Nearly 80 percent of more than 1,000 homeowners recently surveyed say they believe now is a good time to sell a home, yet many don't plan to list their homes anytime soon.

Numerous would-be sellers say they're holding off because of the high price they'd have to pay for their next home, according to ValueInsured's latest quarterly Modern Homebuyer Survey.

Out of the homeowners who say they're interested in selling their home to upgrade or downsize, the survey found:

  • 72 percent say they are concerned with timing the real estate market
  • 63 percent say now is a good time for them to sell, but not to buy, due to high home prices
  • 61 percent are "waiting until prices to buy are better to make a move"

"Homeowners in many cases are eager to sell but don't want to become buyers," says Joe Melendez, CEO of ValueInsured. "These homeowners have experienced a lot of home value volatility and see more uncertainties looming – tax reform, for example. By hesitating, these homeowners are actually controlling the market on both sides."

Melendez says reassuring these individuals is "the key to unlocking inventory."

Some experts have suggested that current homeowners don't want to move because they've locked in a low interest rate for their current property that they would have to give up if they take out a new mortgage on a new home.

According to the survey, however, those low refinance interest rates aren't a major obstacle for current homeowners who would consider a sale, and only 18 percent of homeowners looking to sell say they haven't done so because they don't want to give up their current low mortgage payment.

Twenty-six percent of potential home sellers essentially say they don't want to go through the hassle and expense of home buying: They don't want to pay broker fees, new mortgage closing costs, capital gains taxes or other associated expenses that could possibly weaken their buying power for their next home.

Fifty-seven percent of surveyed homeowners interested in selling and moving say it's likely that they'll eventually move from their current home within the next three years.

However, even that might not add a significant number of homes to the current tight housing inventory because some say they plan to rent out their home or pass it on to family instead of selling it.

Nov. 14, 2017

5 ways to improve your networking skills

How can Real Estate professionals corner the referral market and build relationships that increase their business – but there is an art to networking and making lasting connections.

Home Made Real Estate 5 Tips:

  1. Practice. Networking gets easier if you work on it, so try role playing. If you tend to talk more than listen, practice staying silent. If you have trouble breaking the ice with people, practice breaking the ice before any actual networking event.
  2. Don't lead off with talk about your business. Let the person you're talking to get to know you as a person before you start telling them about your business. "People do business with people, not companies," .
  3. Make a goal. Have a target in mind before attending an event of how many contacts you want to make. Keep pushing yourself to meet new people until you have reached that goal.
  4. Jot down reminders on business cards. You don't want to forget your conversation with the other person, which can be easy to do if you talk to 10 different people. After you receive a person's business card, take some time after the conversation ends to write a few reminders about what you discussed. The notes will help trigger your memory after the event and will help you make more personal and meaningful follow-ups.
  5. Follow up. Don't make the mistake of appearing to be overly aggressive by adding the person as a social media contact seconds after meeting him or her. But don't wait a week either. Wait until the day after you meet someone to send a connection request.
Nov. 7, 2017

0 Florida’s affordable housing programs: Real people, real stories, real impact

Florida Realtors®has launched a new video and study to demonstrate the positive impact affordable housing programs have on Floridians and their communities to give Florida's lawmakers a clear picture of the return on investment of the funds they appropriate to the State Housing Initiatives Partnership Program (SHIP) and the State Apartment Incentive Loan (SAIL) program.

"The state and local government housing trust funds do so much good for so many, but it is not always easy to see their direct impact both on people and the economy," says 2017 Florida Realtors Secretary Cheryl Lambert, who also served as the immediate past chair of the state association's Attainable/Workforce Housing Committee. "This is all about educating our legislators on the true value of these trust funds. We know they have hard decisions to make, and that's why it's important they see first-hand the effect of those decisions."

The video, called "True Stories of Florida's Affordable Housing Trust Funds," features several Floridians who talk about the obstacles and tragedies they faced in their lives, and how finding an affordable home helped them achieve stability. They include a previously homeless woman in West Palm Beach, a U.S. Army veteran in Clearwater, a senior in Hernando and a law enforcement officer in Tallahassee.

"Each of these stories is heartbreaking – but also triumphant when you consider how far these people have come and how they were able to use these programs to rebuild their lives," says Lambert.

The affordable housing study, which was commissioned by Florida Realtors and conducted by the Florida State University Center for Economic Forecasting and Analyses, breaks down the economic impact of the SHIP and SAIL programs for each of Florida's 67 counties from 2006 – 2016.

Of the $1.3 billion appropriated for these programs during that timeframe, $12.54 billion was generated in sales and revenues, 94,149 people were employed and $2.97 billion in wages was earned. This means that for every dollar the Florida Legislature appropriated over those 10 years, $9.50 was generated by SHIP and SAIL programs in economic activity for the state.

The study also projects the economic impact of these programs all the way through 2030, with results showing an average of 4,178 jobs a year, $1.02 billion in economic output each year and $274 million a year in earned wages.

"We wanted the video to focus on the human side of the these affordable housing programs because that is what really matters in the end," says Lambert. "But we knew the economic impact results would have a story to tell as well. All I can say is wow, what an impressive story it ended up being."

The State Housing Initiatives Partnership Program provides very low, low and moderate-income families with assistance to purchase a home, money to repair or replace a home and many other types of housing assistance. The State Apartment Incentive Loan program provides low-interest loans on a competitive basis to affordable housing developers each year.

Oct. 30, 2017

No Chance prices will fall in Real Estate for FL

Orlando and Tampa are among the large U.S. markets least likely to see home prices fall in the next two years, according to a report from Arch Mortgage Insurance.

The report finds that home prices have only a 2 percent chance of falling in Orlando and Tampa over the next two years, a low-risk level that tied 36 other U.S. markets.

At the other end of the spectrum, Fort Lauderdale and Nashville probably won't see prices rise over the next two years either, but they still have a noticeably higher risk with a 35 percent chance of that happening. Austin, Texas, has the third-highest probability, at 25 percent, followed by Miami's 17 percent and West Palm Beach's11 percent, according to Arch MI.

In explaining Fort Lauderdale's and Nashville's rates, Arch MI cites "home prices growing faster than incomes, which is hurting affordability."

Arch MI estimates that the average probability of home-price declines for America's 401 largest cities is 4 percent, which it calls "an unusually low number."

The report suggests that Florida will remain the best economic performer in the South for at least another year, led by tourism, residential and public construction.

The report also found that Orlando is one of America's 10 hottest housing markets, when looking at the country's 100 biggest metros. Orlando's home price index grew 12.5 percent in the past year.

Oct. 27, 2017

Want to sell to Chinese Buyers?

According to the National Association of Realtors®, the number of international buyers of U.S. properties has surged in recent years, accounting for a record 284,455 homes that sold for $153 billion during the year-over-year period ending in March.

Of that total, Chinese buyers accounted for 20 percent ($31.7 billion), making it an important demographic targeted by luxury listing agents.

Michi Olson, vice president of relocation and business development at Alain Pinel Realtors, says agents working with Chinese buyers should consider using the WeChat mobile app.

"It's a great app," Olson said. "It is free – free phone call, free FaceTime, free audio message, free texting. And if you put your WeChat ID on your business card, they [Chinese buyers] will immediately feel a connection with you."

WeChat is the dominant messaging app in China, with 963 million users; however, it has yet to catch on in the United States, mainly due to the popularity of Apple's iMessage, Facebook Messenger, WhatsApp, Google Hangouts/Google Chat, Slack, and basic SMS (short messaging service).

Even so, Olson says agents should still consider WeChat, noting that "we have a lot of Chinese agents working at our company … and if I send them a WeChat, I get a response no matter what time of the day or evening it is."

Oct. 25, 2017

Bubble? Nowhere in sight for U.S. housing market

U.S. housing markets are expected to remain healthy through at least the end of 2018, with no housing bubble in sight and no projection of home prices falling, according to the Fall 2017 edition of The Housing and Mortgage Market Review (HaMMR), released by Arch Mortgage Insurance Company.

The HaMMR features the Arch MI Risk Index, a statistical model based on recent housing market indicators. The index suggests that over the next two years, the probability of home price declines in America's 401 largest cities averages just 4 percent – an unusually low number.

The trend reflects broad-based favorable fundamentals, such as a tightening job market, relatively low interest rates, a low number of homes for sale and an overall housing shortage.

"People waiting for home prices to fall before buying may want to change their strategy, as the overall housing market is expected to stay strong for the foreseeable future," says Dr. Ralph G. DeFranco, Global Chief Economist, Mortgage Services of Arch Capital Services Inc. "Our research shows no housing bubble is forming in the United States, with prices overall near historic norms compared to incomes."

The HaMMR also finds that some recent concern about U.S. home prices hitting all-time highs is overblown because, after adjusting for inflation, national home prices are still 10 percent below their prior peak.

However, recovery from the housing crash is not universal. While prices have increased in Colorado, Idaho, North Dakota and the Pacific Northwest (Washington and Oregon), areas like New England and energy-extraction states like Alaska, West Virginia and Wyoming are growing more slowly.

Oct. 25, 2017

Flipping Returns As Investors Push Into Markets

 Real estate observers say that house flipping, which declined after the financial crisis in 2008, is on the rise again, thanks to low interest rates and rising home prices.

Last year, 5.7 percent of all home sales were flips, the highest level since 2006, according to Attom Data Solutions.

The trend is attracting the interest of Wall Street: Last week, Goldman Sachs bought Genesis Capital, a leading lender to house flippers. The strategy requires fast access to money from developers who are willing to pay higher interest rates to get it. The loans are backed by the property typically run for a year or less.

For the lenders, the loaned funds to flippers offer reliable returns of about 8 percent from borrowers who must meet minimum investments, generally $100,000. The loans come with risks, however, including developers unable to pay them back and a drop in real estate prices that could make properties hard to sell or even rent.

Investors say hard-money loans are more stable than a bank mortgage because they're secured by properties at a lower loan-to-value ratio, a risk assessment used by lenders. Hard-money lenders boast of the speed in which they finance loans, typically in less than a week, compared with several months for a traditional bank.

For the smaller builders and house flippers who rely on these loans to do business, the speed with which these lenders can have the money ready trumps the high interest rates they charge.

Oct. 19, 2017

Clients don’t always pick the best-looking agent

Think being attractive and using lots of superlatives to describe a property helps a real estate agent succeed?

According to recent research published by the American Real Estate Society (ARES), that thinking may be off the mark.

The study, published by ARES in the Journal of Housing Research, was conducted by Michael J. Seiler, Ph.D., of the College of William & Mary; Aaron Arndt, Ph.D., and Mark A. Lane, Ph.D., both of Old Dominion University; and David M. Harrison, Ph.D., of the University of Central Florida.

"Seiler's work in experimental real estate is ground-breaking, as we can now begin to see buyers' decision-making process for the first time and how it influences transaction outcomes," says Ken Johnson, Ph.D., real estate economist at Florida Atlantic University's (FAU) College of Business, ARES publication director, and co-developer of the Beracha, Hardin and Johnson Buy vs. Rent Index.

The researchers investigated whether customers' overall impression of online property listings can be influenced by the real estate agent, and whether this influence depends on the customer's demographic characteristics. A sample of 1,594 potential homebuyers took an online audio/visual tour of a typically priced home in their area. Subjects were shown one of eight conditions in which the researchers varied agent gender, agent attractiveness and pathos (enhancing the verbal description of the property with superlatives).

The results show that segments of customers are drawn to different real estate agents – but contrary to expectations, customers were not necessarily drawn to similar agents or more attractive ones.

The study found that:

  • targeting customers with the same demographics is not necessarily an effective marketing strategy
  • agent attractiveness does not entice customers in a way that is consistent with the customer's sexual interest
  • There is no significant difference by gender or marital status

In addition, agents that enhance their verbal description of the property with superlatives influenced some subjects positively and others negatively.

"Our study shows that an agent's physical attractiveness, similarity to the prospective home buyer, and use of pathos influences the overall impression of the home, but not in a consistent enough way to specifically instruct agents to adopt a certain strategy," Seiler says. "Importantly, adopting the incorrect strategy could very well work against the agent."

Oct. 13, 2017

How big a gamble is a condemned home?

 It could be the deal of a lifetime or your client's worst nightmare. But just because a house has been condemned doesn't mean it can't be a fit for buyers who don't mind a little risk.

First off, it's important to understand the definition: A condemned property is simply one that the government has taken over from a private owner, according to Desare Kohn-Laski, broker and owner of Skye Louis Realty in Coconut Creek, Fla. This can happen for a number of reasons: if the home has stood vacant (typically for more than 60 days), utilities have been discontinued, or an inspector discovers specific hazards.

"You certainly can buy it," says Kohn-Laski. "In some cases, you may need to tear down an existing structure and start over. In others, you can make changes to the property that are in compliance with the city's codes, thus 'lifting' its condemned status."

Condemned homes often sell for little more than the value of the land, which may amount to just a few thousand dollars. That means clients may be able to rehab the house and then increase its value significantly.

But these transactions may take more time to navigate, since you usually must work with a bank or the government to purchase a condemned property. Buyers will need to know what, or if, any violations or liens are attached to the property's title.

Financing can also be a hang-up for some buyers looking to go this route.

"Most traditional lenders only lend based on the condition of the property as it currently exists," says Christy Murdock Edgar, a real estate practitioner in Northern Virginia and Washington, D.C. "There may be many costs associated with rehabbing a condemned property that aren't covered by the lending process."

Buyers may need to consult a private lender to structure a loan based on the property after rehabbing it so they can combine demo and construction costs into one lump sum. Or, buyers can set up a short-term loan if the intent is to flip the property.

There are plenty of risks purchasing a condemned home – and the cost of restoring the home could be higher than the value of the house.

"If (the condemnation) was due to severe structural or repair issues, you might end up losing a lot of the value in the cost of rehabbing the property itself," Edgar says.