MARKET REPORT: April 2021

 

With the highest medium and average sales prices that we have seen in over a year and  inventory weighing in at record lows, April 2021 rang in an unprecedented time in real estate. A surefire indicator of market conditions, 6-9 months of inventory is considered a balanced market. Under 6 makes for a Seller’s market, and over 6, a Buyer’s market. The average inventory in Florida today across all price points is 1.8. That’s right, a mere 1.8! Never fear, however, hope isn’t lost for the motivated buyer in Florida.

Whether you’re a buyer or seller, this market calls for strategy. To approach real estate with a recipe for success, you must account for the ingredients at hand.

Here’s the bread and butter of it: cash sales are up significantly in Palm Beach County, according to the April 2021 Florida Realtors report. It’s important to remember “cash sales” doesn’t always mean green: but instead, that the transaction was not contingent upon financing.

 So, for our seller’s out there: you’ve got high probabilities of a cash offer coming your way. Now, does this mean you shouldn’t accept a finance offer? Not in the least! It means that Sellers are empowered to “demand” certain elements should you accept a mortgage. Such as a quicker loan commitment— meaning the contingency for finance ends faster (including appraisal and loan conditions). You can also weigh your options on whether to allow an appraisal contingency— for the right buyer, omitting this step may suit just fine, and the finance offer can move forward.

As for buyers? It’ll be key to keep in mind that you’re competing against cash offers— so offers need to be written aggressively, and with the least amount of contingencies. That said, it’s important to ensure you’re protected as well; and in that, a good agent will make all the difference.

Now factors aren’t the same across all price points. April’s market sweet spot is the $400-599k price point. In this turf, homes are selling in a stunning 8 days. That, compared to the 1,000,000 plus market, which is an average of 27 days to contract. So if you’re selling a home at $500,000, your price is right, the place is properly staged, and sports curb appeal? Well, you’d better start packing!

Buyers—I’m sure you’ve read your fair share of stories on scarcity, that homes just can’t be found. We’re here to tell you that they absolutely can! Simply put, you’ll need three tricks to compete in this market: an aggressive offer, the preparation to write it quickly, and a partnership with the right agent who has your back and your interests in mind.

Sellers— are you scared to sell because you haven’t yet pinned down where you’ll go next? Not to worry, we have a plan for that. Let’s partner up to sell your home and gain you the most we can, while holding space for a strategy that allows you time to find the right home for your needs. It’s a Seller’s market out there, and you’re in the driver’s seat for both your sale AND your purchase. Sit down with Noreen and I of the All About Florida Homes team of Lang Realty, and we’ll put the priorities of you and your family front and center to build you a strategy that feels the perfect fit.

 

NEWSPAPER FEATURE: A Formidable Team in Today’s Competitive Market

✔️ Business continues to be strong, and it all starts with world class service — we’re so excited to have been featured in the Sun Sentinel newspaper, with this lovely article that ran in the Sunday, May 16th issue!

Trends: Moving to Florida

By: Amy Snook
Special to the Boca and Delray newspapers

Our world has changed so much in just a few months. For those of us fortunate enough to maintain our health during this crisis, we were forced to manage our lives in a very different manner.

We learned to work from home, we learned to balance home life with work with absolutely no escape for quiet time. We were forced to slow down and even developed some new skills out of necessity. Many of us are now Zoom experts, learned how telehealth works, learned to enhance our cooking, homeschooled our children, learned the importance of human interaction and friendship, and even learned how to workout at home. Buried in all of the sadness and dismay that came with COVID-19 were some very relevant and important life lessons about priorities.

The hope is that we all implement changes to our lives, for the better, and grow as a world moving forward. People in general are evaluating their lives and in particular where they are living their lives. They are looking at how best to protect their families and how best to survive in a catastrophe such as the one(s) we have been experiencing.

It therefore makes perfect sense that people from big cities are evaluating whether to remain living in the city or to move to the suburbs. Quarantine was difficult for everyone but for those of us in warm weather, we were afforded an opportunity to get out often for fresh air, and realized how important this is for our mental and physical well-being. It is not surprising that Realtors’ phones are ringing with Northerners looking to relocate to South Florida.

How do you evaluate where to live in a completely new state? This is where Realtors play an essential role in this relocation process.

Realtors are the homebuyers’ gateway to their new home. It is our job to get to know you and understand the lifestyle that works for you and your family. We need to educate the homeowner on the various cities and what each has to offer. So often we meet a buyer who starts out saying I “must” live near the beach but as we educate them on the options east, they quickly realize that they get much more house for the same price west and there are western communities with an easy, direct route to the beach. You can have it all if you make an informed decision. Looking for a golf club community but don’t want a large equity investment? Realtors can guide you to golf course communities that do not mandate membership making it an option not only for you but for a future buyer should you ever decide to move again.

It is a Realtor’s job to assist you in finding the right community and to protect you as you make your investment.

Providing walk through options for showings without a buyer physically having to be here to physically walk through is more important now than ever. As listing agents, we are adding the 360 tours, which allow potential buyers to “walk through” the home with the use of a mouse guiding the view as you virtually walk through the prospective home. For our buyers, if a particular property we are looking at does not offer at 360 tour – we are resourceful and utilizing technology to virtually walk you through all nooks of the home.

Partnering with the right Realtors is key to relocation.

Amy Snook, a 1990 graduate of the University of Maryland, is a partner in the All About Florida Homes team of Lang Realty, along with co-partner Noreen Payne of Delray Beach. She has been practicing real estate and title insurance for 17 years and is currently the Florida State Vice President for Women’s Council of Realtors. Amy is also a director of the Realtors Association of the Palm Beaches and Greater Fort Lauderdale and a director of Florida Realtors. She resides in Atlantis, Florida.

Buyers Waiting for Prices to Come Down Will Be Disappointed

“Some buyers were waiting for the next recession, thinking home prices would fall again – but recessions aren’t created equal. The latest downturn exposed those myths.”- FloridaRealtors.org
 By: Russ Wiles

NEW YORK – The current economic downtown has been odd in so many ways. Why shouldn’t it expose some economic myths and misconceptions as unreliable, if not outright untrue?

When it comes to understanding the relationships involving home prices, bank deposits, interest rates and unemployment, many disconnects arise. Here are a few:

High unemployment and home prices

You might think that as the nation’s unemployment rate has spiked during this social-distancing recession, that would put pressure on home prices, forcing some owners to miss payments and discouraging buyers.

So far, that hasn’t been apparent. Home prices were up 2.5% on average this year through April, according to S&P CoreLogic Case-Shiller.

Low interest rates, which make homes more affordable, are one factor supporting prices. Also, stimulus and other government payments have enabled millions of Americans to meet their obligations. Plus, the economic slump has lasted only about four months so far, so the full impact may not have been felt yet. If the economy recovers strongly from here, negative housing fallout might not materialize in a big way.

Still, it does seem like the other shoe could drop. Fitch Ratings, the credit-rating agency, currently sees home prices nationally as 6.1% overvalued based on recent price increases, heightened unemployment and the possibility of lower incomes and rents. Values are most frothy in Nevada, Idaho, North Dakota, Texas and Arizona, Fitch said.

The degree to which housing might become more overvalued depends on the future path of unemployment and personal incomes, said Suzanne Mistretta, a Fitch senior director.

The company sees the U.S. unemployment rate easing to 7.8% next year from an average 10.3% in 2020. Though not approaching overvaluation levels of 20%-plus from 2005 to 2007, housing still could reach its highest level of overvaluation in a decade, Fitch warned.

Federal deficits and interest rates

Many people used to assume widening federal deficits would exert a crowding-out effect, pushing interest rates higher as the supply of debt mushroomed and private savings were siphoned from other investments. Few people seem to be focused on this connection anymore, given that interest rates keep dropping while Washington’s borrowing needs continue unabated.

One explanation for why the link doesn’t seem to work is the lack of inflation, as inflation and long-term interest rates tend to move together.

Another is the preference among investors for owning government bonds, which carry high credit ratings, during periods of heightened uncertainty. When things get tough, investors get nervous. They snap up government bonds with preservation of capital, not yield, as the primary goal.

As the Tax Foundation noted in a 2016 report, some economists had been suggesting that budget deficits reduce economic growth by boosting interest rates and diverting private saving toward the purchase of government debt. But in practice, “It has been hard to find an empirical link between deficits and increased interest rates or reduced investment,” the group concluded.

Rates are even lower, and deficits higher, today.

Low yields and deposit accounts

You would think that with bank deposit accounts, money-market mutual funds and other risk-averse instruments yielding next to nothing, investors would be ready to move their money elsewhere. But so far, millions of people are willing to accept virtually no yield so long as their assets remain safe.

Bank deposits spiked by $1.2 trillion in the first quarter, the most recent figure tracked by the Federal Deposit Insurance Corp. That was nearly four times the size of any other quarterly deposit gain over the past decade. Americans also have been flocking to money-market funds and other risk-averse instruments. Money-fund assets are up more than $1 trillion so far this year, reports Money Fund Intelligence newsletter.

It’s not like risky stock-market investments have been faring all that poorly. The broad market was up roughly 43% from its recent low in late March through July 9. But for a lot of people, safety reigns supreme – and they’re willing to pay a price for it, in low returns.

College graduates and layoffs

Before the recession, the vast majority of people with bachelor’s degrees who wanted jobs could get them. As recently as March, the national unemployment rate for college graduates was 2.5%. That was well below comparable figures for less-educated Americans, such as the 4.4% rate for people with only a high school diploma.

College graduates also typically earn more – $1,248 a week on average for holders of bachelor’s degrees only, compared with $746 for those with a high school diploma only, according to a May update by the Bureau of Labor Statistics.

However, that picture has changed a bit amid this coronavirus-induced economic slump. The unemployment rate for college grads more than tripled overnight to 8.4% in April and 7.4% in May before easing to 6.9% in June, according to the Department of Labor.

That’s still well below comparable rates for less-educated groups, such as the 12.1% June unemployment rate for high-school graduates. (The department also tracks workers based on whether they have some high school attainment and some college.)

Still, it lays to rest, at least temporarily, the notion that college graduates are immune from layoffs or other career bumps, especially amid an economic backdrop as strange as this one has been.

Saving money during recessions

You might think now would be a tough time to save money. During recessions and other periods of high unemployment, more people are financially stressed, the reasoning goes. It would be the time for many individuals to lean on their savings to help make ends meet.

That might be the case for a lot of people, but it certainly doesn’t tell the whole story. The nation’s savings rate often has climbed during recessions, and while real-time numbers aren’t available yet, that could be the case again.

Part of this might reflect a reluctance or lack of opportunity to spend money. Think how much you have saved in recent months by eating at home rather than at restaurants, not taking vacations and so on. Perhaps many people also are making a genuine effort to get their budgets under control by putting off various types of spending.

It’s not just individuals, either. A March survey of corporate finance officers conducted by the Association for Financial Professionals noted the largest increase in three years of businesses holding short-term investments at banks.

 

https://www.floridarealtors.org/news-media/news-articles/2020/07/buyers-waiting-prices-come-down-will-be-disappointed

Utilizing Technology as Realtors in the Future! 360! Virtual Tours!

 

 

Amy speaks to friends,clients, and anyone looking for some answers as to how we can step up our game to make technology helpful and exciting. With Virtual tours and new technology anything is possible.

 

Working With Buyers In A Covid-19 Environment

Working with Buyers in a Covid-19 Environment

By: Noreen Payne

     Sitting at my desk and pondering the path forward during this time of social distancing and virtual work during Covid-19, I wonder how things will be different in our personal residential real estate business once we make it through these challenging times. But, for now, the focus is on how we continue to serve our buyers who are not only wanting to buy a home but also have to. Like many of our colleagues, we’re also looking at ways to conduct our business virtually. When it comes to our buyers, for now the days of picking them up in our cars and face-to-face interaction are on hold. Those of you who know me know I’m missing those personal moments immensely! 

That said, I’m finding that using tools such as FaceTime, Zoom, App Files, Video and Virtual tours can also go a long way toward building a solid relationship. In fact, we’ve just closed on a new home purchase with a buyer who has never set foot in the home they just bought! Though this is the first time we’re weathering a pandemic, this isn’t the first time we’ve done this. Remote contact can be a common way for buyers to purchase, especially investors who trust us with their goals.

     In the case of our recent close, we started in the classic Residential Real Estate fashion, doing what we do best. The fact-finding process, once done in person, can be handled via conference call. During the call I asked a lot of questions and did even more listening. Then I created the usual searches and shared them over email—after which came the usual back and forth feedback, mostly done via virtual tours, photos and a few FaceTime calls.

    Working in this manner with our buyer, we actually found the perfect home in no time! I set the showing with the listing agent and luckily the home is vacant and on a SUPRA, therefore, no contact/no touch deemed necessary. Over FaceTime the buyers and I took our time going through every inch of the home, down to the street on which it’s located. We negotiated the deal and went under contract. At the time of inspection, I met the inspector, who we know very well. As a side note: It’s my firm belief that having trusted partners working with you at all times is a must! I unlocked the door for the inspector and reconvened with the client over FaceTime to give them the update.  Obviously, many more things can happen prior to closing. In this case, we met General Contractors, interior designers, landscapers, plumbers, electricians, and more. It was a great help having an agent on the listing side who was incredibly accommodating and a pleasure to work with. In these days of Covid-19, our spirit of teamwork is being put to the test. Now more than ever, we’re all pulling together in the best interest of our clients to ensure smooth closings like this one. 

    In this time of uncertainty, my initial reaction was to withdraw—even marketing didn’t feel right. But, I believe these days the reality is that our clients now need our support more than ever (of course at a safe six-foot distance).

About Noreen Payne

Noreen Payne is a partner in the All About Florida Homes team of Lang Realty. She and her co-partner, Amy Snook, provide concierge-level real estate service in South Florida. She is currently Chairman of the Board for the Delray Beach Chamber of Commerce and is on the Board of Directors for The Achievement Center for Children & Families, and is an active volunteer with The Caring Kitchen.

 

 

How We Navigate Virtual Real Estate!

Amy explains how more than ever our technological tools are important in maintaining our social distance and health. The AllAboutFlorida Homes Team has all the right tools to help you list or buy your home. We know exactly how to navigate during these uncertain times and want our clients to feel comfortable knowing that we have a plan!

 

 

COVID-19 Personal Financial FAQ’s for Homebuyer’s

1. My company’s offices are closed, and I am having a hard time providing my final verification of employment within the 10 days prior to loan closing.

FHA and RHS are allowing verbal verification of employment. Specifically, your employer can provide this by phone. RHS is also allowing email verification. If you cannot get either of these, the lender will require higher reserves to cover risk. 

Fannie Mae and Freddie Mac will allow verbal verification when available and an email verification under certain conditions. They have also made other forms of temporary verification available in order to help with verification while social distancing

2.My lender indicated that the IRS has shut down and they cannot process loans without an income verification document that only the IRS can generate. Is this true?

Luckily, there is precedence for an IRS shutdown based on several recent government shutdowns. Some lenders may require this document, but Fannie Mae, Freddie Mac, and FHA do not so this is a lender overlay.

Fannie and Freddie both issued guidance in January 2019 following the previous government shutdown to note that they do not require the 4506T IRS tax transcripts at closing. Rather, they only require a request for the document be signed by the borrower. However, they do require the tax transcript be submitted as part of their post-closing review. NAR has asked both Fannie and Freddie to clarify and publish updated guidance given the unique challenges posed by COVID-19.

Furthermore, the IRS reopened this facility during the shutdown as it was deemed essential. We have reached out to the IRS on this point.

  1. I have heard that the FHA, Fannie Mae, and Freddie Mac have raised rates and fees on borrowers with lower credit scores or smaller down payments?

    These claims are not true. To date, neither the FHA nor Fannie Mae and Freddie Mac have made any changes to credit scoring or down payment requirements. The only change they have made for borrowers is to allow MORE flexibility in how a lender can verify employment.

    However, some individual lenders are adding their own, higher standards on these products. The rational is that the cost of servicing these loans has surged due to the widespread forbearance that is taxing servicers’ resources. Under forbearance, the servicer must continue to pay PITI to the investor, but the sheer volume of forbearance to deal with the COVID-19 response is unprecedented. Since lower-credit borrowers are more likely to take forbearance and servicing is harder to get, lenders are less willing to extend this credit regardless of the FHA or GSEs’ standards.

    NAR sent a letter to the Treasury, Federal Reserve, and the Federal Housing Finance Agency requesting help for servicers dealing with the unprecedented demands on funds due to broad forbearance requests. Improving servicing is one key to improving the flow of funds to borrowers and homeowners.

    Ginnie Mae has announced the creation of a new program, that should help alleviate lender concerns and improve access to mortgage financing. The program will provide cover for lenders by advancing them the money so they can make the required pass- through payments to investors during the forbearance period.

We’re here for You! Virtually!

We have so many tools available like Facetime, Virtual Video home tours, E-signatures, and many more no contact options to keep our clients comfortable and safe during this climate!

As agents and people our main goal has always been to help our community and lend a helping hand wherever possible. You can always count on us to answer the phone- we are always open to answer any questions you have, in real estate and beyond. Please do not hesitate to call, we are here to be a resource to you!

30-Year Mortgage Rate Drops Again, Down to 3.33%

“Rates dropped for the second week in a row due to “improvements in market liquidity and sentiment,” says Freddie Mac economist.” – FloridaRealtors.org

MCLEAN, Va. – Freddie Mac’s Primary Mortgage Market Survey for this week found declines for the second week in a row.

This week, the 30-year fixed-rate mortgage (FRM) averaged 3.33%, which is down from last week’s 3.5%. It averaged a 0.7 point for this week; a year ago, the 30-year FRM averaged 4.08%.

“Mortgage rates have drifted down for two weeks in a row and that drop reflects improvements in market liquidity and sentiment,” says Sam Khater, Freddie Mac’s chief economist.

Khater says the “market has stabilized relative to prior weeks (and) homebuyer demand has declined in response to current economic conditions. The good news is that the pending economic stimulus is on the way and will provide support for both consumers and businesses.”

The 15-year fixed-rate mortgage averaged 2.82% with an average 0.6 point, down from last week when it averaged 2.92%. A year ago at this time, the 15-year FRM averaged 3.56%.

Adjustable-rate mortgages (5-year Treasury-indexed hybrid ARM)) averaged 3.40% with an average 0.3 point, up from last week when it averaged 3.34%. A year ago at this time, the 5-year ARM averaged 3.66 percent.

© 2020 Florida Realtors® (All Credit to FloridaRealtors.org for this article)