South Florida Real Estate Blog by Alfredo Ruiz, Realtor

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.  

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Home Sellers’ First Spring Results Show “Reignited” Demand

Traditionally, April is a dependable month when Boynton Beach home sellers can expect a lively market—and if first reports from across the nation are any indication, the evidence points to a spring selling season that fits the pattern. Just before mid-month, a review by Realtor.com’s Economic Research Director prompted the headline, “Good News for Home Sellers.” Key points:

  • In multiple regions, buyer demand has been “reignited” due to an increase in buyer affordability in markets where mortgage rates have lowered.
  • The pace of home sales relative to inventory has quickened. This is the first time since March 2018.
  • Supply data (the number of residences for sale in the Realtor.com database), while still somewhat constricted, rose 8% year-over-year.

In the 50 largest markets the overall rate of absorption reaccelerated after 11 months of declines. That turnaround suggests that the busy spring home buying season “could be more active than anticipated”—indicating the likelihood that this year will turn into more of a seller’s market than most prognosticators had been expecting.

 Boynton Beach sellers might be puzzled by the apparent contradiction between a “seller’s market” and reignited demand from buyers. One explanation could be deduced from a survey of 1,015 respondents who plan to buy a home within the next 12 months. Conducted by Toluna Research and published last week, a high proportion of this spring’s home shoppers:

  • Nearly...

What’s the New Rationale for Owning Your Home?

Lately, the common sense advantages to homeownership have been joined by a newcomer—one that doesn’t immediately leap to mind. It comes at an interesting time, as more and more of the national discourse focuses on healthcare issues.

The newest reason why owning your own Delray Beach home should have a high priority? Why it’s for your health!

That might sound like a bit of a reach if the only source behind it was the National Association of Realtors®. They do in fact point to recent studies that find homeowners “generally happier and healthier than non-owners.” Doubters inclined to question the validity of such a generalization might be reassured by the fact that the health outcome findings held up after being “controlled for factors such as income and education levels.”

It turns out that real estate industry promoters aren’t alone in finding a good health connection with owning your own home. In connection with World Health Day, the Habitat for Humanity group put together a “Health and Homeownership” paper. It linked one common sense phenomenon—the better condition of owned homes with those of rented homes—with health outcomes “including respiratory conditions such as asthma, exposure to toxic substances, injuries and mental health.” All in all, they felt confident in reporting “better health outcomes for homeowners.”

I’m standing by to offer healthy measures of help and advice for all your Delray Beach real estate dealings. Just call me!  and be healthy!   ...

What Two Positives Coincide with Monday’s Boca Raton Tax Day?

Boca Raton’s week starts off with Monday’s federal income tax filing deadline—AKA, Tax Day. Boca Raton’s Tax Day may not be the kind of annual observance that people look forward to—although for homeowners at least, it does serve as a glorious reminder of the value of the home loan interest deduction. Then, too, for Boca Raton’s non-procrastinators, a second positive may already have been experienced with the early arrival of a U.S. Treasury refund check.

Along those lines, last Friday the IRS put out a news flash noting that a third of taxpayers had yet to file their returns. Of the 153 million individual returns Uncle Sam expects to receive for tax year 2018, 50,000,000 had yet to be filed. That meant that for many Boca Raton residents, the weekend was spent with less time devoted to the pro basketball and hockey playoffs or the  Master’s golf tournament. Instead, teeth-gnashing encounters with the income tax forms had taken place—sometimes resulting in Automatic Extension form filings.

As a side note, taxpayers in Maine and Massachusetts get until April 17 to file because of their Patriots’ Day—a legal holiday celebrating the first battles of the Revolutionary War. Why two days instead of one? That’s because Tuesday is Emancipation Day in Washington D.C., and the IRS can’t require that anybody’s tax return be filed when they aren’t open for business. For residents in those two states, it must be nice to know that (at least when he’s got the day off) Uncle Sam keeps his hands in his own pockets.

If your own Tax Day has been observed without that vital home loan interest tax break,...

Wary Delray Beach Readers Suspect Real Estate Trickery

 

You can’t blame Delray Beach residents who’ve been bamboozled in the past for having grown cautious as April 1 approached. They braced themselves for this Monday, knowing that the practical jokers will have been hard at work concocting 2019’s April Fools Day tricks. There would be spoof ads, fake headlines, and who-knows-what else? to watch out for.

That’s why you could hardly fault those who instantly dismissed last Friday’s banner headline in the Wall Street Journal. It might be unfair to print an April Fools prank ahead of time—but pranksters have done that before.

And the article certainly bore all the earmarks: an almost believable premise (slightly understated to build credulity) followed by the requisite goofy supporting specifics. Maybe it wasn’t as wild a story as one the Onion might foist off—but it did add the kind of ridiculous details that would set up a satisfying “APRIL FOOLS!” payoff. 

The 4% Mortgage Is Back! was the shocking headline—followed by the parody subhead, “Its Biggest Drop in Over a Decade.” The supporting text talked about mortgage rates “fast approaching 4%”—rates “so low” that “economists and lenders believe it will help jump-start the housing market again”!

For Delray Beach real estate watchers who have been following actual Delray Beach mortgage interest rates over the past few years, the overwrought details...

Will Boynton Beach Homeowners Follow Downsizing Trend?

For as long as I can remember, it’s been an unchallenged prediction for real estate—in Boynton Beach and throughout the nation. Sooner or later, the great postwar population bulge known as the “Baby Boomers” will decide en masse to downsize their residences—and when they do, it will have predictable repercussions throughout the housing markets. Smaller Boynton Beach homes should soar in popularity, while larger properties languish—well, at least take a bit longer to sell.

So last week’s Wall Street Journal article scarcely raised an eyebrow. “A Growing Problem in Real Estate: Too Many Too Big Houses” dealt with recent Sunbelt market conditions without suggesting the trends don’t also apply nationally. For sure, Boynton Beach homeowners whose properties fit the article’s focus—“large, high-end homes”—could easily assume the author’s cautionary pronouncements could apply to them. The “deep price cuts” Sunbelt sellers increasingly had to offer were, after all, what has long been predicted. The diagnosis was as expected. “Large, high-maintenance houses no longer fit [boomers’] needs”—and “younger people aren’t buying them.”

As a generalization, it’s hard to argue with the long-standing reasoning. But another truism in real estate is that individual properties are by definition unique—something that’s even more true of those “large, high-end” homes. There is also some contravening evidence. Boynton Beach homeowners will also find reassuring an earlier feature, “Why Many Retirees Are Upsizing Into Larger Homes.”...