South Florida Real Estate Blog by Alfredo Ruiz, Realtor

What 10 Things Should Boynton Beach Open House Hosts Know?

 

It was the Washington Post’s real estate reporter Michele Lerner who came up with the list of the most important “10 things” house hunters look for when they stop by Boynton Beach open houses.

The ‘ten things’ list is a useful one—and every bit as relevant for homeowners selling their own Boynton Beach homes. It’s valuable to be aware of which features are bound to get the closest scrutiny in open houses—which are usually preludes for serious shoppers’ later appointment showings.

The list of ten could be shortened into four major categories:

  1. Most of the ‘ten things’ will get a nod from any experienced Boynton Beach homeowner: they’re the structural elements that everyone who has ever born responsibility for a home will recognize as the most basic. The integrity of roof, basement, foundation, and fireplace are among them, as are the age and apparent condition of the mechanical systems.
  2. Some other features like window functionality and appearance of trim and fascia will reveal the quality of craftsmanship and the level of maintenance.
  3. Two of the ‘ten things’ dealt with water detective work. Plumbing bears scrutiny, as do evidence of flooding: foundation work, cracks in bricks (not just the mortar), or warping under sinks, cabinets, and vanities.
  4. The final group is actually just a single detail—one...

Boca Raton Real Estate Factor that Brightens this Picture

The title alone was slightly chilling. Boca Raton readers didn’t have to be anywhere near senior discount age to furrow their brows if they happened to come across last week’s white paper, “Retirement Insecurity 2019.”

Worse yet, there wasn’t much in the National Institute on Retirement Security’s 28-page manifesto to brighten their mood. Fortunately for Boca Raton homeowners who are anywhere near retirement age, the picture that emerged left out at least one major contraindicating factor that Boca Raton Realtors® like me will be quick to point it out.

Washington, DC-based NIRS was forwarding the basic thesis—which is demonstrably valid—that the nation’s retirement infrastructure has undergone a decades-long process of systematic degradation. The traditional pension system has been replaced by individual accounts like 401(k) plans—or by nothing at all. Other factors magnify the problem—like changes in the Social Security retirement age and other adjustments.  

Boca Raton homeowners probably share the sentiments revealed in this year’s NIRS poll which showed that Americans are worried about financial security in their older years—and convinced that leaders in Washington don’t understand how hard it is to prepare for retirement. Specific numbers are shocking; like, “When all working individuals are considered, the typical American has zero dollars saved for retirement” and “Among workers who have managed to accumulate savings in a retirement account, that typical account balance is only about $40,000...

Do Delray Beach Home Sales Reflect a New “Facebook Effect”?

According to an educator in NYU’s finance department, if your Delray Beach house has experienced the kind of growth that’s been typical over the past couple of years, your Facebook friends will be more likely to buy a home themselves. Improbable as it sounds, Dr. Johannes Stroebel says that his research shows this as a measurable probability because “friends’ experiences…influence personal behavior” when it comes to their housing decisions.

The results of Dr. Stroebel’s study emerged from a panel discussion held this month. The conversation took place in Washington, DC, as part of the annual Realtors® Legislative Meetings & Trade Expo. Most of the headlines from that gathering centered around the midyear forecast by NAR Chief Economist L. Yun. He sounded the kind of optimistic note that will be music to local homeowners—particularly if they are planning to sell their own Delray Beach house anytime soon. After several years of wage growth that exceeds home price growth, the two are now aligning more rapidly than heretofore. The bottom line is that “home sales should be much stronger.” The continuation of low mortgage interest rates adds to that probability.

NAR optimism aside, the announced Facebook effect prompted further discussion. It was shown that renters whose Facebook friends experienced a 5% growth in their house prices over the past two years have a 3% greater chance of buying their own home within the next two years. The effect is more pronounced in “socially-connected counties,” where positive experiences “were even shown to increase the size of a home” that was purchased.

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Controversial Question: Should We Charge the Kids Rent?

 

For a lot of parents, the whole notion of charging a child rent for their lodging in the family’s Boynton Beach house seems like an all-but-unthinkable miserly idea. It might seem like an elevation of finance over family—something that crosses a basic societal norm. How in the world could a self-respecting parent place a price tag on providing shelter for their offspring? The issue is real for many Boynton Beach families—especially right now, the peak season for high school and college graduations.

Last week, the Wall Street Journal’s Beth DeCarbo provided a thought-provoking commentary on that subject. Its timeliness was framed by her rueful observation that a whole lot of this month’s graduates are “ready for their next big move…back home.”

It could be argued that the statistical support has grown less valid this year because even if “more than one-third of young adults lived at home in 2015,” the current job outlook is considerably brighter than it was (last Friday’s weekly Unemployment Claims were down another thousand). Still, it’s never been uncommon for young adults to need to return to the parental Boynton Beach nest while assessing prospects for their first steps into the real world. But what if employment is not a problem? How long is long enough?

The point of the article is that many financial advisers counsel that charging rent to longer-term returning progeny is the preferable arrangement—especially for the returning children themselves. One private wealth adviser points out that the practice teaches kids “to budget, to prepare for life.” The...

Just In: Consumer Climate Ripens for Buying, Selling a Home

Wikipedia defines “consumer confidence” as “the economic indicator that measures the degree of optimism that consumers feel about the overall state of the economy...” Boca Raton homeowners who are contemplating selling their Boca Raton homes may not base their decisions on polls measuring public confidence levels—but when the climate is promising, it sure doesn’t hurt!

Wikipedia completes its “consumer confidence” definition with “….and their personal financial situation.” In fact, it’s well known that people answer pollsters’ questions largely based on their own situations. That’s why businesspeople of all stripes track the monthly University of Michigan’s Consumer Sentiment Index like hawks.

So – wow! Last week ended with news that upended what had seemed to be a less than sunny financial outlook. Strong job and sales numbers had seemed to be being overridden by worries about world trade troubles. The tariff back-and-forth between the U.S. and China had dominated business news for weeks. The stock market had registered a couple of days of headline-grabbing declines (although they’d been followed by less well-publicized rebounds). And gasoline prices were rising...

For those on the fence about whether now is the right time to make a major financial commitment like buying or selling a Boca Raton home, the economic atmospherics could have seemed to weigh on the side of waiting for a more favorable outlook.

Apparently, that isn’t how consumers view things. On Friday, the benchmark consumer confidence index registered...

How is Selling Your Delray Beach Home Like an Action Movie?

If Hollywood action-adventure movie writers have figured anything out, it’s that after the bad guy has been defeated and the hero and heroine are relaxing, ANOTHER bad guy should suddenly appear to pose an unexpected post-finale even nastier threat! By now, audiences have learned to expect this (but if the filmmakers are clever enough, we can still be taken by surprise).

Selling your Delray Beach home may not seem analogous to an action movie, but there can be some parallels—particularly at the last minute, when the sale seems in the bag and you’re all but packed up and outta there.

The danger here comes in the form of communications from the buyer. No matter how amicable the buyer and buyer’s agent may have been in the course of negotiations, as the deal nears completion, there is always the possibility that an unexpected sticking point might crop up. There are many possible reasons that this happens.

For one, the act of moving is recognized as one of life’s major stressful events—and people can react to stress in unexpected ways. A failure to fix some relatively minor household maintenance issue that was agreed upon might trigger a deal-threatening misunderstanding (even if the reason for the failure was unforeseeable and can be quickly ameliorated). Since selling any Delray Beach home necessarily involves many details, their sheer volume means that some misunderstanding or another is always possible—and misunderstanding can easily lead to distrust. Given the size of the transaction and accompanying elevated stress levels, the danger of a deal-breaking misunderstanding is always a possibility.

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How Boynton Beach Architecture Differs from Malibu’s “The Case”

If you page through this month’s Boynton Beach listings, you’ll find a collection of homes that embody all kinds of structural styles. There is no single “Boynton Beach architecture”—although some homeowner associations are aimed at preserving a pleasantly homogeneous neighborhood look.

Now, from out in Southern California, comes word of a small but impressive architecturally conscious project—one noteworthy on a number of fronts. Appropriately, last week’s national rollout came from the Business Insider magazine. That’s appropriate when you consider that the price tags attached to residences in the project—“The Case”—will prohibit buyer interest from all but heavyweight business titans.

At $40 million - $100 million per, the five houses being built by developer Scott Gillen easily fall into the self-described “super-luxe” category. Once completed, the five will find themselves nestled within one of the few gated communities in Malibu. Since it took Gillen eleven years to get his 24-acre project approved by the notoriously fussy California Coastal Commission, it’s a good bet that “The Case” may be the last.

The astronomical price tags are easy to understand when you consider the exclusivity of the enclave, its security provisions, and its architectural bona fides:

Exclusivity. Not debatable. Come on! The humblest neighbor’s house costs $40,000,000.

Security. Since The Case is sited atop a 200’ bluff with a 360-degree outlook, the place is strategically similar to what ancient...

Determination Helps when Buying a Home for the First Time

On Thursday, USA Today published a view of what many of this spring’s first-timers have encountered in their inaugural home-buying ventures. Our own Boca Raton trends don’t precisely match those tapped by their research—but the themes cited in the national press are familiar here, too.

Although the headline emphasized the difficulties those buying a home for the first time may encounter (“3 Challenges Facing First-Time Homebuyers This Spring”), elsewhere in the piece, some bright spots were acknowledged. For Boca Raton readers inclined toward a ‘glass-half-full’ point of view, they tend to balance out the familiar challenges.  

Bright Spots:  

  • According to the Mortgage Bankers Association, affordability has advanced with the easing of 30-year fixed mortgages to a national average of 4.42%.  
  • Inventory “has loosened up slightly.” This is a relative finding since the U.S. still lags in properties for sale (at least compared with the historical norm).  
  • Prices.  Price growth has slowed “and leveled off” according to the MBA.
  • Spring buying. Nationally, good, old fashioned negotiations have replaced the frenzied bidding wars of last year. But USA Today isn’t calling this spring a buyer’s market—only one characterized by fewer competing offers.

Challenges:

  • Home prices. Prices are still...

Personality Matching & Delray Beach Real Estate Investments

Although the title of her article was “What Will You Do with Your Investment Property?” marketing writer Lynn Pineda’s piece came down to a dissection of a simpler binary choice. It took on the Delray Beach real estate investor’s elemental decision: flip or rent? And rather than concentrating on the run-of-the-mill financial analysis you’d expect, it smartly recognized the other dimension that should enter into that choice: the investor’s personality.  

Most investors who buy Delray Beach homes do so with a strategy already in place. The purchase is usually propelled by the value proposition the property represents: a potential for profit that’s evident from the start. The attractive arithmetic may have been based on a fix-and-flip analysis, or on a traditional rental analysis. Especially for first-time investors, the ultimate success of the endeavor (and probably whether it becomes the first of many to follow) will probably also be determined by how well the temperament of the investor aligns with the advantages and disadvantages of each strategy. A breakdown of the advantages for each makes the point:

For the fix-and-flip strategy, the advantages are well-publicized. Author Pineda lists “Quick Money,” “No Long-Term Commitment,” “No Need to Deal with Tenants,” “Moving On to the Next Project,” and “Forced Appreciation” (that is, making improvements that increase value before selling).

For the renting out strategy, the advantages are quite different. Listed are “Long-Term Rental Income,”...

What Change Makes Delray Beach 2nd Homes More Feasible?

 It looks like Delray Beach second homes may have just become more affordable for many who have considered investing in one, but who couldn’t make the numbers work. The reason is technical, yet far from being one of those ‘inside baseball’ details. Its practical impact can be significant.

The news was published with little fanfare at the start of this month, buried as it was in Fannie Mae’s revised Selling Guide. That’s the document that mortgage lenders refer to when the semi-governmental agency’s backing is being sought for a new home loan. In Section B2-1-01, which outlines the requirements for Fannie-sponsored home loans for various occupancy types, there appears a lone footnote at the bottom of the page dealing with “Second Home Properties.” The footnote reads, in part:

“If the lender identifies rental income from the property, the loan is eligible for delivery as a second home…”  

Previously, both Fannie Mae’s and Freddy Mac’s qualifying language had been widely interpreted as forbidding second homes’ use as rentals of any kind. “Borrower shall occupy, and shall only use, the Property as Borrower’s second home” seemed to many mortgage underwriters to restrict renting—and when that phraseology was included in the loan’s fine print, borrowers frequently assumed the same. Since supplementary rental income can be a decisive element in a buyer’s decision-making, the dampening effect was real—especially as web services like Airbandb make casual renting more common.  

An important part of my job is...