Skip down to page content.

Real Estate Information Archive

Blog

Displaying blog entries 11-18 of 18

Buying a Home is 38% Less Expensive than Renting!

by Joanne Hiller

In Trulia’s 2014 Rent vs. Buy Report, they explained that home ownership remains cheaper than renting throughout the 100 largest metro areas in the United States; ranging from an average of 5% in Honolulu, all the way to 66% in Detroit, and 38% Nationwide!

The other interesting findings in the report include:

Even though prices increased sharply in many markets over the past year, low mortgage rates have kept home ownership from becoming more expensive than renting.

Some markets might tip in favor of renting later this year as prices continue to rise faster than rents and if – as most economists expect – mortgage rates rise, due both to the strengthening economy and Fed tapering.

Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.

Bottom Line

Buying a home makes sense. Rental costs have historically increased at a higher rate of inflation. Lock in a mortgage payment now before home prices and mortgage rates rise as experts expect they will.

Kitchen and Bath Trends for 2014

by Joanne Hiller

Designers have been installing eco-friendly cabinets and flooring in kitchens and bathrooms for years, but green design is fast becoming the most popular design trend of 2014. Energy-inefficient incandescent light bulbs are being phased out in favor of LED bulbs; dishwashers, refrigerators, sinks, and vanities are all incorporating these high-impact, low-wattage bulbs. And designers are making space in kitchens for integrated trash and recycling storage.

Lower Water Bills
But the biggest trend in kitchen and bath design is water conservation. Touchless faucets conserve gallons of water. So do most dishwashers on the market today, since most consume less water than hand washing a load of dirty plates. In the bathroom, whirlpool tubs have fallen out of favor with many homeowners; instead, designers are specifying large, walk-in showers in the master bathroom, equipped with water-saving shower heads.

A Standout Fridge or a Hidden One
When it comes to kitchen appliances, stainless steel is still the finish of choice, followed by economical white. But some designers are taking a more daring approach by specifying colored appliances in all shades of the rainbow. Integrated appliances are also popular design choices in 2014; designers are hiding refrigerators and dishwashers behind cabinetry to give open-concept spaces a more welcoming feel.

Safety First
The population is aging, and kitchens and bathrooms are being redesigned to accommodate the needs of the elderly. Wide, zero-threshold doorways are easier for wheelchairs and walkers to glide over, while pull-down shelves and cabinetry make reaching for high objects easier for those with mobility issues. Showers are also getting a makeover, with grab bars and hand-held shower devices. As an added benefit, these universal design upgrades make homes safer for both older and younger generations alike: young children unsteady on their feet will also benefit from a trip hazard-free home.

Kitchen Must-Haves
Every kitchen cabinet should have soft-close hinge hardware, since this is now the industry standard. And quartz countertops have trumped granite as the industry favorite; quartz countertops have fewer seams and are nonporous, so homeowners can forego the sealing process. Homeowners who spend their budget on these upgrades will see a return on their investment when it comes time to sell.

Where are Home Prices Headed over the Next 5 Years?

by Joanne Hiller

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey

The latest survey was released last week. Here are the results:

  • Home values will appreciate by 4.5% in 2014.
  • The average annual appreciation will be 3.94% over the next 5 years
  • The cumulative appreciation will be 19.7% by 2018.
  • Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of almost 11% by 2018.

Individual opinions make headlines. I believe the survey is a fairer depiction of future values.

Negotiating Tips for Home Buyers

by Joanne Hiller

The real estate market experiences fluctuations just like any other industry. Currently, it is a buyer’s market, which means buyers have the upper hand when it comes to buying a home. Since there are more homes on the market waiting to be sold than there are buyers who are willing or able to purchase them, a lot of negotiating can happen and most of it is going to be in the buyer’s favor. Homebuyers will find the following negotiating tips helpful.

Leave the sellers guessing.
If you want to negotiate, never let the sellers know just how much you want to buy their home. Once the sellers find out that you have a strong desire to buy the home, they don’t need to entice you with a free homeowner’s warranty, free appliances, or a discount on the asking price.

When negotiating, name specific aspects in disrepair.
It is important to name the facets of the home that are in a state of disrepair. The current homeowners are probably already aware of these problems, but now that they know you are also aware of them, you have a bit more negotiating power on your side. Ask the current homeowners to repair existing problems or to lower the asking price accordingly. You might not get what you ask for in full, but chances are good that you will get some of it—and that’s what negotiating is all about.

Get pre-approved for your loan.
If you have documentation that you are pre-approved for a mortgage, you stand a better chance of getting your dream home. The sellers can see that you are able to get a mortgage to buy their home. This places you higher on the list of potential homebuyers, especially if no one else has pre-approval papers to offer.

Let the sellers know that you’re looking at other homes.
If the current homeowners aren’t rigid about their selling price, informing them that you are interested in another home should provide you with some additional negotiating power. In fact, provide details about the other home to validate your claim. This gives the sellers a chance to come down in their asking price or sweeten the deal with a homeowner’s warranty, inspection fees, or appliances that can remain with the home.

Entertain the notion of counter offers.
While receiving a counter offer might not be the most appealing experience, entertain the thought of countering the sellers counter offer. If you do, it lets the sellers know that you are still interested in the home and are willing to keep negotiating. Once the ball is back in their court, they can decide if they are willing to lower their price enough for you to buy.

7 Mistakes to Avoid when Investing in Real Estate

by Joanne Hiller

There is money to be made in real estate, but you need to think about real estate investing as the business it is. Here are some common mistakes that beginning investors should avoid.

1. Getting emotionally involved.
This is the biggest and most common mistake beginning investors make. Emotions and business do not mix well. In this case, falling in love with a property will almost always ensure that you pay too much to make it profitable.

2. Paying too much.
To make money investing, you have to find a good deal. Look for properties that need a little fixing up. Your goal is to find a distressed property that you can purchase for around 70 percent of comparable listings.

3. Ignoring schools.
Good schools attract good renters. Conversely, only the most desperate renters are willing to subject their children to failing schools. And renters in desperate financial situations are not renters you want occupying your property.

4. Buying a low-priced home in a bad neighborhood.
Property that is situated among vacant or foreclosed homes will not be enticing to future renters. Property in neighborhoods that experience vandalism and other crime is not worth the investment. Before you buy, make sure that this is a neighborhood that renters will want to live in.

5. Putting too much of your own money down.
This is not your home; it is your investment. As such, you should choose a property that will bring enough rent to cover the mortgage even if you put little money down. When you keep your funds liquid, they are available for emergency repairs and upgrades.

6. Forgetting to calculate taxes.
Sometimes high property taxes mean that your rental property is in an area with great schools and other quality infrastructure. However, sometimes it simply means the area is overtaxed or has poorly managed local government. If your proposed rental property includes high property taxes, make sure that the area’s desirability compensates for the extra cost.

7. Disregarding local trends.
Check out the area’s employment opportunities. Are they growing or shrinking? Find out about any scheduled future development. Is the area adding parks, shopping, or even a public transportation hub? Proposed new condominiums and apartment complexes could indicate a growing community, which is good news. However, new condos and apartments also mean competition for the best renters. Weigh the pros and cons of local trends before you invest.

Gov. Rick Scott and politicians from the Tampa Bay area to the Washington beltway rang the warning bell last year. So did real estate agents struggling to sell homes in flood-prone areas of Florida.

Soaring flood insurance rates, they warned, threatened to wreak havoc on property values throughout the state. In the cross-hairs, in particular, was Pinellas County, which had more older, low-lying homes facing a sharp flood insurance increase than any other county nationwide.

Now there's evidence that a congressional fix early this year to stall the harshest of the rate hikes coming under the National Flood Insurance Program has stabilized property values. At least in ground zero of Pinellas County.

In fact, the market rebound from the flood insurance scare has been strong enough that Pinellas property owners receiving their tax bills in the fall may be surprised to discover home values are rising by double digits nearly across the board, even in flood-prone neighborhoods like Shore Acres in St. Petersburg.

On average, property values are expected to be up 11 percent countywide, said Pinellas County Property Appraiser Pam Dubov, who is prepping notices of proposed taxes to send out in August in advance of the November tax bills. In at least one beachfront neighborhood, in the East Lake area, and in one Midtown neighborhood, property values jumped more than 30 percent. Only in a couple of neighborhoods are values down, and then by less than 3 percent.

One reason for the higher values: Even though home sales plummeted in some areas during the flood insurance crisis at the end of the year, there was never a corresponding drop in asking prices before the market rebounded.

Shore Acres is typical of what happened. It started out 2013 strong. But sales came to a virtual standstill late last year amid worries that older homes would lose their decades-long lower flood insurance rates when they changed hands. Anecdotal reports surfaced of buyers of such homes seeing flood rates explode tenfold. Out of 46 sales in Shore Acres last year, only two occurred in the fourth quarter.

Hit by a groundswell of complaints, Congress intervened in March, passing a measure that repealed the biggest of the rate hikes being rolled out under the Biggert-Waters Flood Insurance Reform Act of 2012. At the same time, Lloyd's of London and other private insurers pushed into the market, driving flood insurance rates lower.

The housing market responded with gusto. In the first half of this year, Shore Acres already has had 26 sales with an uptick in prices.

The result: Home market values in Shore Acres for tax purposes are running 16 percent higher than the previous year.

"Their sales certainly dropped off, but then they bounced right back up," Dubov said.

Home values are based in large part on sales prices. In Pinellas, the median sales price in 2013 was $153,000, up from $134,900 in 2012; in Shore Acres, the median sales price was $283,500, up from $236,725 a year earlier.

Other area counties saw a similar price jump: Median sales prices in Hillsborough County were $175,000 last year (up from $148,000 in 2012) while Pasco sales prices were $133,000 (up from $115,000).

So, what will Dubov tell perplexed homeowners who saw their neighbors laboring to sell their homes last year?

"I do expect to hear from some people, knowing you can't please everyone," she said. "I also expect some people will be very relieved that their property values didn't go the other direction, putting them back underwater (owing more than their home is worth)."

Under the Save Our Homes cap, no matter how large of an increase in market value, the tax bill for a homesteaded resident will not go up more than 3 percent a year. The cap is even lower if there is a smaller rise in the Consumer Price Index.

Dubov's office is supposed to calculate the market value of homes as of the end of 2013, based on sales volume and sales prices, taking out sales costs and Realtor fees. However, Dubov took into account a broad pickup in early 2014 as assurance that a late drop in 2013 in the number of sales was "a temporary blip" and not part of a trend. "I'm not going to gut the market on prices that never fell," she said.

The story could easily have been radically different if Biggert-Waters had not been partially repealed.

"It had great potential to do harm. It stopped the market for a while," Dubov said. "And now, it appears to not really be having a big effect.

Jake Holehouse, a local insurance agent and activist fighting the rate increases under Biggert-Waters, said the marketplace has not only returned to stability but is heating up toward 2006 levels in some places — like high-end condos in downtown St. Petersburg.

The "biggest thing that never happened," Holehouse said, was Congress' decision to keep a flood map "grandfathering" provision in place for older homes. That means as long as a house remains in compliance and has a construction date of 1971 or newer, its flood map will remain unchanged for the lifetime of the property.

"That's the biggest driver of confidence" among buyers, he said, who would otherwise have to worry about such a home getting rezoned under a new map, triggering much higher rates.

The emergence of private flood insurance options — from Lloyd's of London to Florida insurers like Homeowners Choice and Security First — has greatly helped to stabilize the market, Holehouse said.

Over time, flood rates are expected to continue rising and some insurance agents fear Lloyd's and others will dramatically raise rates after establishing a presence in the flood market.

Gordon Chernecky of Shield Insurance of Tampa Bay, a longtime agent for homeowners and flood policies, is worried any euphoria over surviving the flood insurance mess will be short-lived.

Too many of the sales in flood zones are from cash buyers who don't buy flood insurance, Chernecky said. Moreover, he said, the delay in sharper flood rates is only temporary. His bet: Congress will let FEMA hike rates dramatically over time and private insurers, like Lloyd's of London, will drop the lure of relatively cheaper insurance.

"Lloyd's has been this angel from heaven, but they've come and gone before," he said. "This is a big problem coming down the road. People are still really oblivious to what's going on."

For now, though, Dubov gives kudos to Capitol Hill for stepping up.

"We'll never know what the impact would have been if Congress had decided not to act," she said.

Does Brand Matter When Picking a Real Estate Agent?

by Joanne Hiller

DOES BRAND MATTER WHEN PICKING A REAL ESTATE AGENT?

You know the names, Coldwell Banker, Prudential, Re/Max, and Century 21. The list goes on and so do the ads, because national real estate brands blast away at consumers with marketing programs from TV spots and local signs to search engines and social media. But if you’re a buyer or a seller, does the brand name really matter?

Of factors that go into picking a real estate agent, some evidence suggests that brand name isn’t important. This according to the National Association of Realtors, only 3% of buyers and 4% of sellers report considering an agent’s association with a particular firm to be an important factor.  Clients just want to know that they are getting the same exposure as the national brands, and they are.  What they really care about is service, not the name on the door.  And smaller firms provide great service because the environment is less corporate.

Let me give you some real shocking Real Estate news. If we all were to assume that the Big names in Real Estate do most of the business (that’s because they are big) we would be totally wrong. Here are a few examples…let’s take New York City, the real estate capital of the world. The big guys are far behind, you see the names like Brown Harris Stevens, Douglas Elliman, Bellmarc Realty, Corcoran Wexler just to name a few. Now let’s go to Los Angles Stanford Raffles Realty, Westside Estate Agency, Jade Mills Estates and Peter Lorimer Group. When these agency’s started out they never lost sight of what made them Big.  SERVICE, SERVICE AND SERVICE.  The TV Brands as we call them are about one thing more corporate mentality.

Where is the playing field now? It is equal. In the past it was perceived that the TV Brands were getting a large portion of the business but now thanks to the internet, we are seeing that 95% of people search for their homes on line.  It really comes down to the Multiple Listing Service which dominates throughout the country.  The name or brand of the company is not as important anymore, and what matters most is the specific agent’s reputation, regardless of where the agents works.

Having said that,  where does Island Estates Realty fit into this scenario?  Since 1969 located on Island Estates * Consistently the Island’s Top Producing Office * Reputation Above The Rest * Performance Above the Level of the Corporate Brands *  Marketing Beyond Your Expectations - Professional Photography , Videos, Brochures, Glossy Postcards, New Interactive Floor Plan * Powerful Internet Presence  * New Cutting Edge Web Site with Hundreds of Links and International MLS

Should I Buy a Home Now?

by Joanne Hiller

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall down the road, while others are convinced that home prices will go up.

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have fluctuated, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, a one point rise in interest rates could cost tens of thousands of dollars over the life of your mortgage!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates while they are still available.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

Displaying blog entries 11-18 of 18

Contact Information

Joanne Hiller
Coldwell Banker Residential Real Estate
110 Island Way
Clearwater FL 33767
(727)460-5721
Fax: (727)446-2691