South Florida Real Estate Blog by Alfredo Ruiz, Realtor

Boynton Beach Home Loan Rates Likely to Stay Low—for the Moment

Last week, Boynton Beach residents who found themselves at any stage of preparing to buy or sell Boynton Beach homes had to have been motivated by what came out of Washington. Last Wednesday was the day the Federal Reserve officials were set to announce their new target for the benchmark federal funds rate. That’s the key trigger for future Boynton Beach home loan rates, which largely determine how attractive (or not) upcoming loan packages offers will be.

Since any rise in rates raises monthly payment amounts—even if the underlying size of the loan remains the same—potential buyers and sellers have reason to watch what the Fed does with varying degrees of apprehension. Lately, strong economic performance has made it increasingly likely that rate rises will be forthcoming—and in its announcement, phrases like, “the economy is growing at a strong pace” were included. Earlier pronouncements have strongly indicated that three or four target raises are likely this year. So far, there have been two.

The news was encouraging for those with homes currently on the market, or soon to list—as well as for those looking to buy. Not only did the Open Market Committee announce that the target rate would remain unchanged; they also indicated a raise would likely be forthcoming soon. In other words, Boynton Beach’s current historically low home loan rates won’t be nudged upward by the Fed, but only for the moment.

It’s the real estate equivalent of one of those “Hurry before the sale ends!” furniture ads on TV—or the weekly grocery store specials insert with an end-of-the-week expiration date.

Unlike either of those, buying or selling a home is such a major purchase that the Boynton Beach home loan rate is only one element of what makes a decision that will be seen as a fortuitous one over the years and decades to come. I hope you’ll call me to lay out Boynton Beach’s...

Top 8 Real Estate Questions: Some Have Answers!

Like almost everyone else in Delray Beach who spends time online, I often come across lists. Headlines that list the “Top 10” or “Top 5” of almost anything usually catch my eye—especially the ones with “real estate” in the title. I’ve trained myself to just glance at the items and move on if they don’t add to the day’s useful information.

Checking through the most recent crop of Delray Beach real estate lists yielded, “Top 10 Issues Affecting Real Estate,” “Top 8 Ideas for Real Estate Investing”, “5 Best Real Estate Investment Books”, etc.. This week there were a lot of lists of “Top Real Estate Questions”—which got me to thinking. What would a seriously thoughtful list of Real Estate Questions for Delray Beach consist of? I came up with my own top 8 list of real estate questions for Delray Beach residents:

  1. 1.      Do I intend to buy a home in 2018?
  2. 2.      Do I intend to sell a home in 2018:
  3. 3.      Do I intend to sell and buy a home in 2018?
  4. 4.      Will 2018 prove to be a better year to buy or sell a home than 2019 will be?
  5. 5.      Will Delray Beach homes be more expensive to buy if I wait?
  6. 6.      Will I have a harder time selling my Delray Beach home if I wait?
  7. 7.      Who is the best agent to help me sell my Delray Beach home?
  8. 8.      Who is the best agent to help me buy Delray Beach homes?

The first three questions are the most consequential. Delray Beach is now past the midpoint of 2018, so if you don’t...

Delray Beach House Flipping vs. an Extreme Makeover Model

Most Delray Beach real estate turnaround practitioners follow what might be called “The House Flippers’ Creed”: buy, fix, sellas quickly as possible! The speed factor isn’t just because, as in most businesses, volume dictates profitability. It’s also due to the investment’s interest expense—the value of money over time. You don’t need an economics class to see how it can gnaw away at a bottom line.

Now it seems that The Creed’s fundamental hypothesis is being challenged in many parts of the nation—at least by buyers targeting dated homes for their own use. According to last week’s Wall Street Journal essay about the rising tide of “Extreme Makeovers” which focused on residences that have had a single owner for decades. Many are in need of “new interior styles” and technology—and they’re attracting buyers East and West. In other words, dated homes are getting lots and lots of work: extreme makeovers.

Typical was a Washington State 2-bedroom island house, “one of the ugliest houses on the beach,”—so dated that “it generated distaste” among buyers. A sharp-eyed real estate appraiser bought it for $550,000 (a steal for that beach neighborhood)—then began the time-consuming and expensive process of transforming it into a property “that looks new and hip.” Cost: $150,000.

The takeaway for Delray Beach buyers with enough passion and energy to plow into such a project—is that the results can be worth the effort. One interviewed design expert said, “It’s a metaphorical change of clothes.” Added another, “It’s as much about the style as repairing the plumbing.” But even so, such projects often run into complications. That will come as no surprise to veteran Delray Beach house flippers, who know that even in unextreme makeovers, bringing a property up to snuff...

Boynton Beach Adjustable-Rate Mortgages (ARMs) Lose Luster

If they follow the same path home loan applicants across the nation are choosing, most Boynton Beach mortgage applicants will continue passing up adjustable-rate offerings. As last week’s Real Estate News analysis points out, there are multiple reasons for that phenomenon.

It’s been a decade since the financial meltdown had everyone rethinking the nation’s (and their own) disposition toward the way mortgage products were viewed. The headline may have been worth a chuckle (“ARMs Don’t Have Legs”) but the history that produced it was anything but hilarious—especially for Boynton Beach adjustable-rate mortgage borrowers who fared poorly in the financial meltdown.

Leading up to the crisis, the Mortgage Bankers Association traced a steady gain in popularity for the adjustables. From 1998-2008, the average share of adjustable-rate loans was 20%. With one in five home loan borrowers choosing the mortgages with their featured low initial interest rates, new home buyers and refinance applicants could pencil out budgets that were suddenly workable for properties they wouldn’t otherwise be able to afford—workable, that is, until the “adjustable” part came due. Many buyers made the assumption that, even if their own future fortunes didn’t grow at a pace that would allow higher monthly payments, they could always “cash out” on their investment, since real estate values were sure to grow as they had for years.

The double whammy of the mortgage meltdown and its triggering of the real estate slide put thousands of adjustable-rate mortgage holders in an impossible position, resulting in too many foreclosures—which in turn triggered a feedback-loop of even lower real estate valuations...

Selling Your Delray Beach Home Warrants a Pre-Sale Inspection

 If you’re selling your home in Delray Beach this summer, there’s one piece of pre-sale advice that will almost always pay off: the pre-sale home inspection.

You might be surprised to learn that many sellers elect not to take advantage of this service—but I can’t say I blame them. A home inspection costs money, and it seems counter-intuitive: “Why would you want to bring up your home’s flaws?”  Plus, it’s just one more thing to do when selling your Delray Beach home. “Why borrow trouble?”

In fact, there are compelling reasons to take this extra step:

  • Discovering hidden or otherwise unknown flaws in your home in advance allows you ample time to fix them before the home goes on the market
  • If you discover and fix these issues, you’ll able to boast a “clean inspection” report in your marketing
  • If you don’t discover and fix these flaws, your buyer will—and this discovery won’t surface until the home is already under contract, listed as “contingent” in the MLS, and consequently off the radar for all the other potential buyers. If you and the buyer then can’t come to an agreement about who will fix or pay for the problems, your home will fall out of contract. When it goes back on the market, ten to twenty (or more!) days will have been wasted, putting you back at square one with a higher DOM (Days on Market) count. That can ultimately lower your property’s appeal.

Even if you elect not to resolve the issues you discover, any buyer writing an offer for your home will already have knowledge of these issues, so the faults...

Delray Beach Home Loans : What you need to know

When you think about it, the whole set-up behind The Wizard of Oz movie has a lot to do with basic real estate—particularly when it comes to how Delray Beach home loans are created. It can illustrate a little-understood basic fact about the mechanics of how Delray Beach home loans originate. Looked at this way, L. Frank Baum’s story is more than just a cautionary tale about what happens when a perfectly good farmhouse gets uprooted and reestablished in a different state (or planet, maybe).

Since a refinance is a type of home loan, the connection with Delray Beach home loans couldn’t be clearer. In Oz, not only is the new neighborhood full of new risk-carrying hazards like uncaged lions, flying monkeys, and a variety of witches, but the land is being run by an untrustworthy Wizard who seems to exercise unchecked authority. If that weren’t enough to give any investor pause, there’s the worrisome matter of the poppy fields just outside of town…

If Dorothy’s parents were to try to refinance the farmhouse in its new site, they would certainly have serious problems finding a lender willing to participate at reasonable rates. And it’s here that Wizard illustrates a little-understood basic about how home loans and refinances come to be created.  

Most people think of a home loan strictly as an agreement between a lender and borrower. That’s only true on the surface. In fact, another entity is involved: the investor. Investors are outfits like Fannie Mae, the VA, FHA, etc.

Lenders (the Delray Beach banks and mortgage companies) are in business to offer loans which they can sell to investors. The investors issue guidelines to the lenders—guidelines that specify the degree of risk they are willing to take. In fact, cautious lenders strive to further minimize risk levels specified in the guidelines in order to be certain that a given loan will interest an investor.

So when Dorothy sings “...

Boynton Beach Housing Future : Will it Need SciFi Solutions?

Florida and Boynton Beach are not immune to at least one outfall from what the New York Times calls “the great American single-family home problem”: the looming shortage in affordable places to live. What might seem to be mostly a distant challenge for faraway metropolitan areas could eventually affect single-family neighborhoods, too. Areas where today “low-density living is treated as sacrosanct” may well come to experience varying degrees of change.

Ground Zero. California is (as usual) Ground Zero for what may become a more widespread trend. It’s already an extreme example of an affordable housing crunch—the state’s median home price is over $500,000. That’s more than twice the national average, but, as we’ve often seen, where California goes, the rest of the nation often follows.

Extreme Example. The economics of rising housing prices can eventually force shifts in local thinking. The Times points to areas where housing costs are so high that local employers say, “the young people that we want to hire can’t even afford a car.” One Texas firm bought a private jet to ferry company lawyers to service Bay Area clients. It was cheaper than paying local lawyers because they have to charge enough to offset local housing costs.

Sci-Fi Solutions You don’t have to be a science fiction writer to foresee a future with huge incentives for anyone who comes up with ways to lower the price of housing. Two directions already in play:    

  • One that’s been touched on before is large-scale 3D printing of houses. That requires giant mobile 3D printing machines—but they are already being perfected. You need only Google “large 3D printers” to see videos of prototype houses they have already produced. Examples can cost as little as $4,000 to build, but they don’t address the cost of land issue.
  • One developer in (guess where?)...

Delray Beach House Tour Etiquette Guide in Two Words

When it comes to Delray Beach house hunting, sooner or later you’re bound to find yourself confronted by a question of proper house touring etiquette. After all, you’re an invited guest in somebody else’s Delray Beach home—someone who you don’t know, who isn’t around, and whose house rules are a cipher.

 As you’d expect, the normal rules of courtesy apply—except when they don’t. For instance, if you are visiting a friend’s home, it wouldn’t be very polite to go about opening up the bedroom closet doors—but on Delray Beach house tours, unless you are instructed otherwise, that’s behavior that gets a green light. You might be treated to a “peek and shriek” if the seller has resorted to some last-minute decluttering via closet-packing, but house touring etiquette says that closet inspection is legit. Closet space, after all, a valuable part of the home’s layout.

Less clear are any number of gray areas. When your house hunting leads you through an extensive number of Delray Beach home tours, you’re bound to run into some of them. Guidance from the website Houselogic names the most common house tour protocol questions:

  • Is it okay to bring in my coffee?
  • Can I use the bathroom?
  • How about a quick selfie next to that nice [fill in the blank].
  • Can I plop down on the sofa?

Fortunately, you don’t need to dust off a copy of Miss Manners or send off a query to Dear Abby, because the answer to these and other modern house touring conundrums is summed up in a simple, “just ask.” Whatever the answer might be, you will have fulfilled your duty as a most conscientious house hunter.

One more thought: those two words have an alternate form that applies when I’m your buyer’s agent. We may be out together on the kind of comprehensive house surveying expedition I line up for my clients. I will have arranged...

Selling Your Delray Beach House

Last week’s Wall Street Journal’s “Heard on the Street” headline “Why Home Prices Have Nowhere to Go But Up” may have guaranteed attention—but at the cost of advancing a pretty iffy notion. Then again, if you have been window shopping (or is it “screen shopping”?) through the Delray Beach listings anytime recently, the idea could well have seemed less preposterous than usual.

Of course, markets go up, down, and sideways. In the residential real estate, any “down” movement has a centuries-long track record of proving to be temporary. But “nowhere to go but up”? Putting aside the common wisdom that nothing is guaranteed in a free market, author Justin Lahart does lay out a reasonable argument for why today’s pattern of home price rises is peculiarly supportive of his theory. The situation sets up like this:

  • Consumer optimism is measurably peaking. After such a lengthy stretch of flat expectations, a wave of would-be house buyers is out there (“there are a lot of people who would like to buy a house…”).
  • Employment is robust—and so is the economy (“…and plenty of them can afford to”).  
  • Since many builders dropped out during the housing bust, today’s builders face less competition. With building materials and labor costs on the rise, they have less reason to increase their pace of construction.
  • Inventory of available housing remains below working-age population growth.

The normal course of events has it that when home sales volume falls, prices should be forced downward. That makes sense—unless the slowdown is due to a lack of homes to sell. Taken together, all the factors add up to an explanation for the rare combination of slower sales volume yielding rising prices—which is what has been happening in wide swaths of the U.S.

Delray Beach home prices may not always...

Delray Beach Home Prices and an Iffy Proposition This Summer

Last week’s Wall Street Journal’s “Heard on the Street” headline “Why Home Prices Have Nowhere to Go But Up” may have guaranteed attention—but at the cost of advancing a pretty iffy notion. Then again, if you have been window shopping (or is it “screen shopping”?) through the Delray Beach listings anytime recently, the idea could well have seemed less preposterous than usual.

Of course, markets go up, down, and sideways. In residential real estate, any “down” movement has a centuries-long track record of proving to be temporary. But “nowhere to go but up”? Putting aside the common wisdom that nothing is guaranteed in a free market, author Justin Lahart does lay out a reasonable argument for why today’s pattern of home price rises is peculiarly supportive of his theory. The situation sets up like this:

  • Consumer optimism is measurably peaking. After such a lengthy stretch of flat expectations, a wave of would-be house buyers is out there (“there are a lot of people who would like to buy a house…”).
  • Employment is robust—and so is the economy (“…and plenty of them can afford to”).  
  • Since many builders dropped out during the housing bust, today’s builders face less competition. With building materials and labor costs on the rise, they have less reason to increase their pace of construction.
  • Inventory of available housing remains below working-age population growth.

The normal course of events has it that when home sales volume falls, prices should be forced downward. That makes sense—unless the slowdown is due to a lack of homes to sell. Taken together, all the factors add up to an explanation for the rare combination of slower sales volume yielding rising prices—which is what has been happening in wide swaths of the U.S.

Delray Beach home prices may not always...