Real Estate Information Archive

Many people don't understand how easy it is to purchase a home warranty and how beneficial it can be.  A home warranty can be purchased at closing on your purchase but also after you already own a property.  It can even be purchased for a rental/investment property. They can be purchased in ranges from a basic plan at $350 which would cover major appliances such as your refrigerator, water heater, AC unit, plumbing, electrical, etc. all the way to expanded packages which offer coverage on refrigerator icemakers, washers/dryers, mechanical garage door openers, etc.  Another significant benefit of a home warranty is the available payment options. They allow you to pay monthly if preferred and also to cancel at any time with no cancellation fee.                                 

 Another major benefit and option for a home warranty is a Sellers Warranty and these are most utilized on foreclosures or "As Is" deals. These are capitalized on when a Seller (Bank) will not pay for any repairs that the home may need prior to closing. This will enable the purchaser to be covered and have these items fixed or replaced by the warranty company after closing. Overall, purchasing a home warranty should be a high priority for any home owner no matter how new or nice the property may be.

Home prices dipped by less than 1% in July with median home price at $174,000. This is 4.5% below the year-ago level which followed a strong spring season of sales driven by the tax credit. Median home prices remain close to 2002–2003 levels. Distressed sales continue to count for almost 1 in 3 homes sold. The combination of low prices and record-breaking low interest rates means that home affordability is extremely favorable. KW Research.

Dustin Schaller, 850-443-9673, email: dustin@ringtherivers.com

State forecasts property value increases

TALLAHASSEE, Fla. – Aug. 4, 2011 – In a sign that Florida’s housing market may be on the road to recovery, the state’s top economist expects an increase in school property tax rolls next year of 1.3 percent. Though that is actually a slight decrease from the original forecast of 2 percent, it is one of the most promising signs yet that Florida’s ailing and hard-hit housing market is on the mend after four years of plunging values. Florida’s housing market was one of the hardest hit in the nation, the victim of an overwrought housing bubble, loose mortgage standards and a tourism-based economy. The state’s housing woes have become fodder for national newspaper and magazine articles spotlighting the housing glut, examining over-developed South Florida subdivisions with plummeting home values.

But now Realtors, economists and property appraisers say they see signs of a housing market recovery. “We turned the corner,” said state economist Amy Baker, though she cautioned the economic recovery is still fragile. Her forecast was part of a discussion Wednesday of adjusting estimated property tax revenue this year. “The correction from the housing boom was severe and very dramatic on the (tax) rolls,” Baker said. “Now most of that correction is behind us, but we are still not back to the growth we typically see.” She said that property tax rolls are going to stabilize after four years of decreases, with drops over 10 percent in tax rolls in 2009 and 2010.

But is Baker’s forecast too optimistic? After all, Florida’s median home values are still sinking. The latest real estate data shows that the median home price in Florida slipped 2 percent in June to $138,000, and that home sales fell by 4 percent in June from the same period last year. Sean Snaith, an economics professor at the University of Central Florida, called Baker’s forecast “reasonable.” The state’s tenuous economic recovery is heavily dependent on hiring, Snaith said. “The states of the housing market and labor market are intertwined going forward,” Snaith said. “As we see better job creation numbers and a falling unemployment rate, that will help the housing market.” But while Florida’s unemployment rate has inched lower, it still stands at 10. 6 percent in June.

Property appraisers said they are already seeing signs of an improved housing market. Pedro Garcia, the property appraiser for Miami-Dade County, said in the downtown area, populated by high-rise condominiums, home values jumped 12.1 percent this year over last year. In high-income areas, such as Coral Gables, property tax values have begun to inch upwards from last year, Garcia said. “It’s getting better, it’s definitely getting better,” Garcia said. In Lee County, Property Appraiser Kenneth Wilkinson said tax rolls have improved from a 25 percent decrease three years ago to a mere 3.46 percent decrease this year. “I wouldn’t be surprised if statewide we have a very slight increase,” Wilkinson said. “I wouldn’t disagree with Amy’s numbers. It sounds reasonable to me. What we are seeing is residential has bottomed out.”

But property appraisers said while homes and condos appear poised for a comeback, commercial properties are lagging behind. “Commercial property will always follow what is happening in residential,” Wilkinson said. “Commercial went down in double digits this year.”

Realtors and property appraisers say the recovery could still be unhinged by a significant increase in foreclosures, and a so-called “shadow inventory” of homes that are waiting to be put in the market. The forced slowdown in foreclosures due to investigations into foreclosure fraud last year have helped home values in some areas by stalling the number of foreclosed homes, which often bring down the value of homes overall.

Florida Realtors President Patricia Fitzgerald said there are signs of increased housing activity in some parts of the state, but she said recovery is uneven, with some subdivisions seeing robust sales while others aren’t. “We do see more activity, in the lower price ranges,” Fitzgerald said. “In the St. Lucie market, (homes) are selling like hot cakes,” Fitzgerald said. Some of this activity is from investors, who sense the market may have reached its bottom, she said some homes in St. Lucie are selling from $40,000 to $100,000 and many investors are snatching them up, she said, turning them into rental properties or fixing up foreclosed homes for a profit, Fitzgerald said.

“For the most part, you are seeing a big influx of investors coming into our marketplace,” Fitzgerald said. “A lot of those investors are local investors and are using cash.”

Source: News Service of Florida, Lilly Rockwell

Overall I think the market is showing us positive signs.  The biggest indicator to this is the Nation rating us as the 6^th top ranked real estate region in the Nation.  Although the inventory is nearly at 15 months we are seeing stabilization in home prices and amount of transactions.  We are averaging roughly 325 sales a month this is our 4^th consecutive month of avg. home sale price increasing.  Also keep in mind from April to June we are up roughly $15,500 on the average sales price of a home in Tallahassee which can’t be said almost anywhere. 

                Buyers need to also know it’s an amazing time to buy for a many reasons.  One main reason is that interest rates are at a all time low.  Plus if the interest rates aren’t enough to get buyers in the mood we also have had our avg. sales price decrease 19.7% over the past 5 yrs.  With this combination of rates and prices buyers are seeing monthly payments that were unheard of until now.  In Tallahassee it is literally cheaper to own then to rent, it’s just up to you to make the right choice.

-Jason Madsen

I'm sure we've all heard it.  You're talking to a potential buyer who tells you that they still need to sell their existing home before buying.  However, "if I can't sell it, I'll just rent it out," they say.  But the real question is, does this person know what it's like to be a landlord?  Have they really thought it out carefully?  Probably not.  There are several things they need to ask themselves before they consider putting their home on the rental market.

1.  How will they manage the home?  Especially from a distance.  Do they intend to deal with it themselves or hire a property management company?  If they want to have a management company handle it, they will need to factor in those costs.  If they want to do it themselves, they will really need to have a plan of action.

2.  Are they planning to come back and live in the house one day?  If so, then renting it out might make sense.  If not, they may still have to deal with selling it down the road.  And by that point, they may have to put money back into it to get it ready to sell.

3.  Do they live in an area with a strong rental market?  If so,again it may make sense.  If not, then they may need to be prepared to have it sit vacant for a period of time.  Can they absorb those mortage payments while waiting for the right renter?

4. Can they deal with the bookkeeping aspect of renting out a home?   They will need to closely track their income and expenses for tax-deduction purposes as well as tax preparation.  They also need to have a rental application, rental agreement, rental insurance and a background process to insure they get a quality renter.  Again, if they're not up for this, they need to consider getting a property management company to handle this for them - at a cost.

5. Can they deal with tenants?  If they are doing this on their own, they will have to handle this themselves and many people aren't comfortable with confrontation - particularly if it involves late rent payments or damage done to the property.  If they don't want to deal with tenants, a property management company is the best way for them to go.

6. What is their exit strategy?  How long do they plan to rent out their home and what happens if they still can't sell it for a profit at the point where they decide they want to sell? 

These are just some things you might want to let a potential buyer know to consider the next time they say "I'll just rent it out".  That might be a good time to gently remind them that even if they sell their home for a loss now, they may very well be able to make it up on the purchase of their new home. 

One of my greatest frustrations these days is figuring out how to find buyers in a higher sale bracket.  I am having some sales but the average sales price has been low.

The recent TBR Market Snapshot as of 8/25/10 showed that 89% of the sales year-to-date in Leon County have been in the $299,000 range and below.  45% have been in the $149,000 price range and below!  

That still leaves 44% in the $150-299,000 range.  What do we do to try to find those buyers?  It has been suggested that we should do more open houses in this price range.  That's one good idea.  Does anyone have other ideas as well?

By the way, nearly 50% of sales year-to-date have been in the northeast.