RISMEDIA, Saturday, November 30, 2013
As the economic recovery continues to build, Americans are again able to consume and invest; and with recent reports from the U.S. Census Bureau noting 34 percent of American households are rental units, investors are taking notice and rushing to reap benefits of placing investment funds in single- and multi-unit residential property.
“Investor demand for single family properties remains strong,” says Kirk McGary, CEO of Real Property Management, citing a recent study from Zelman & Associates that found investor demand for residential properties ranking at 60.9 on a scale of 0-100. “Trends like this in the housing market have created significant demand for property management companies like ours, as investors choose to put their money in real estate as opposed to the alternatives.”
Although there are many investment options available, real estate vehicles offer the ability to finance a portion of the purchase price to leverage the initial investment to control an asset valued much higher – unlike stocks, bonds and CDs. With lower interest rates available, a small increase in the value of a leveraged property investment can carry a greater return than an unleveraged investment — approximately 12 percent gross according to the same study by Zelman & Associates.
Investing in real estate also offers tax benefits where earnings from investments in CDs, bonds and stocks are taxed. By making deductions from the profit on mortgage interest, cost of property repairs and depreciation, property owners are writing off depreciation of an asset that is actually ascending providing yearly benefits to a long-term investment.
Most importantly, ownership of property improves cash flow. Subsidizing the investment with consistent rental income puts money in the investor’s pocket, covering the mortgage, repairs and additional homeownership costs.
Being able to minimize tenant turnover through timely and concise management reflects on the bottom line, maximizing the return on investment overtime.
More About Buying A Home:
Naples Makes Top 10 Turnaround List
That boom you heard is Southwest Florida building industry: It’s back
By Jack Guttentag | RISMEDIA, Wednesday, November 06, 2013— (MCT)
When a mortgage borrower selects a lender with whom to deal, the identity of the company is much less important to the borrower than the identity of the individual loan officer.
Real estate agents have always understood this. In looking for the smoothest possible financing process, they refer home purchasers to an individual loan officer, not to a company. If a preferred loan officer moves to another company, the real estate agent usually will follow.
This suggests that an easy way for home purchasers to select a loan officer is to follow the recommendation of their real estate agents, and without doubt you could do worse than following that rule. But you might also do a lot better, because the real estate agent’s criteria for selecting loan officers are not the same as yours. The real estate agent wants a loan officer who will get the loan processed in time for the loan to be available on the settlement date, and you want that as well. But you also are very much concerned with the price of the loan, and with the quality of decision support you receive: what type of loan and what combination of interest rate and upfront fees best meets your needs. These issues are of little interest to the real estate agent.
The problem is that the typical borrower has no reliable way of determining which loan officers do well in providing these services, and which don’t. I have long tinkered with the idea of providing a certification process for loan officers, and finally have one in development that should become available early in 2014. In the meantime, it occurred to me that it might be helpful to prospective borrowers if I explained what will go into the certification process. Astute borrowers can do their own certification.
Certified loan officers will offer price integrity, discussed below, and quality decision support, which is discussed next week.
PRICE COMPLETENESS: For prices to have integrity, they must include interest rate, upfront charges expressed as a percent of the loan, called “points,” and upfront charges expressed in dollars. On adjustable-rate mortgages, they must include the margin, index value, maximum and minimum rates, and rate change caps. It is not unusual for loan officers quoting prices to omit fees expressed in dollars, and omitting important features of adjustable-rate mortgages is more the rule than the exception.
POSTED PRICES: Mortgage prices have integrity only if they are the lender’s “posted prices” — those at which the lender is actually prepared to lend at the indicated point in time. Lenders distribute their posted prices every day to all loan officer employees through a variety of electronic systems. Borrowers seldom have access to these systems.
Actual prices may differ from posted prices at two critical points in the loan origination process: the point where a price is quoted to a shopping borrower, and the point where the price is finalized or “locked.”
PRICE QUOTES TO SHOPPERS: The prices quoted to shopping borrowers are often used to select a loan officer. In many such cases, the shopper selects not the loan officer with the best posted price but the loan officer who is the biggest liar. The temptation to “low-ball” quoted prices is difficult for many loan officers to resist.
They can’t be held to the price quote because prices are not final until they are locked, by which time the market will have changed. Lenders post new prices every day, and sometimes within the day.
Prices depend on numerous features of the loan transaction, including credit score, ratio of loan balance to property value, type of dwelling, and type of occupancy. The loan officer looking to land a client, who is asked for a price quote by an impatient shopper who doesn’t volunteer this information, will often assume the best: that all the loan features are such as to justify the lowest possible price quote. If this assumption turns out to be wrong, which is more often the case than not, the quoted price is too low and will have to be revised. By the time that happens, however, posted prices will change, wiping out evidence of the deception while providing the loan officer with a way to explain the price change.
To protect themselves against this ploy, the shopping borrower must have access to the prices posted on the loan officer’s computer, and must make sure that all the transaction features that affect the price have been properly entered. Don’t expect this to be easy; if it were easy, my job would be done with the completion of these articles. The loan officer certification I have under development will require loan officers to make this process easy for borrowers.
LOCKING THE PRICE: At the point where the mortgage price is locked, a home purchaser with a scheduled closing date may be fully committed, which provides a second temptation for the loan officer to cheat — this time by locking a price above the posted price. The protection against this abuse is the same as the protection against low-balling: The borrower must have direct access to the posted price.
Jack Guttentag is professor emeritus of finance at the Wharton School of the University of Pennsylvania.
More About Buying A Home:
Ask the Expert: How to Prepare for a Home Inspection
New Homes are Less Expensive to Maintain
RISMEDIA, Monday, October 28, 2013
Freddie Mac recently released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates hitting their lowest levels since this summer amid market speculation that the Federal Reserve will not alter its bond buying purchases this year.
• The 30-year fixed-rate mortgage (FRM) averaged 4.13 percent with an average 0.8 point for the week ending October 24, 2013, down from last week when it averaged 4.28 percent. A year ago at this time, the 30-year FRM averaged 3.41 percent.
• The 15-year FRM this week averaged 3.24 percent with an average 0.6 point, down from last week when it averaged 3.33 percent. A year ago at this time, the 15-year FRM averaged 2.72 percent.
• Survey shows the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.00 percent this week with an average 0.4 point, down from last week when it averaged 3.07 percent. A year ago, the 5-year ARM averaged 2.75 percent.
• The 1-year Treasury-indexed ARM averaged 2.60 percent this week with an average 0.5 point, down from last week when it averaged 2.63 percent. At this time last year, the 1-year ARM averaged 2.59 percent.
“Mortgage rates slid this week as the partial government shutdown led to market speculation that the Federal Reserve will not alter its bond purchases this year,” says Frank Nothaft, vice president and chief economist, Freddie Mac. “The weak employment report for September added to this expectation. The economy added just 148,000 jobs, which was below the market consensus forecast and less than the 193,000 jobs increase in August.”
For more information, visit www.FreddieMac.com.
More About Buying A Home:
What to Look for in a Mortgage Loan Officer
Housing market heats up — and it’s just getting started
By JUNE FLETCHER | Sunday, October 27, 2013 | NAPLES
Though new homes are being built at a furious pace, real estate market analysts say they aren’t making a dent in Southwest Florida’s housing shortage.
Shelton Weeks, chairman of the department of economics and finance at Florida Gulf Coast University south of Fort Myers, said the surge is driven by the fact that home prices finally have risen above building replacement costs.
But he doesn’t expect new construction will occur fast enough to have a big effect on the resale market for at least two years.
“I don’t think it will take the edge off,” he said. “I expect a healthy market, but inventory will remain tight.”
The latest statistics from MetroStudy show that for the second quarter, annual housing starts were up nearly 42.8 percent in Collier County and 40.7 percent in Lee County from the same period a year earlier.
The firm expects housing starts to continue to increase steadily for the rest of the year.
But new home inventory still remains extremely tight at below-normal ranges: 1.2 months in Collier County and 1.3 months in Lee, the research firm said.
Meanwhile, builders are underscoring their confidence that the boom will continue by taking out new permits.
In August, they were up 30 percent year-to-date compared with the same period a year earlier in Collier County and 42 percent in Lee, the National Association of Home Builders said.
Naples real estate broker Brenda Fioretti notes that builders are building in every price range and location — except the beach, where land is scarce. Many wealthy buyers are buying an older home for its land value, tearing it down and building a custom “dream home,” she said.
Since new homes generally are more expensive than existing ones, that’s pushing some would-be new home buyers into the resale market, real estate agents say.
Currently there are more than 45 active new home communities from Estero to south Collier County, the web site Newconsearch.com says. Others will be launched soon.
Here’s a sampling of what’s available:
* * * * *
The clubhouse at Bonita Lakes will include a resort-style swiming pool and a separate shallow splash zone. There also will be a Har-Tru bocce ball court and lighted Har-Tru tennis courts. photo: Naples News
Ground-breaking for the clubhouse of this gated community took place in September. About 45 homes are in various stages of permitting and construction. Ten of the home designs have first-floor master suites.
■ Builder and developer: Toll Brothers
■ When started: Fall 2012
■ Number of homes when completed: 268
■ Amenities: Two pools, bocce and tennis courts, recreational facilities
■ Project size: 120 acres
■ Types of homes: One- and two-story villa and estate homes
■ Price range: Low $300,000 to upper $500,000
■ Square footage: 2,058 to 4,354
http://www.naplesnews.com/news/2013/sep/01/toll-brothers-holds-ground-breaking-for-at-lakes/
Camden Lakes, 16088 Camden Lakes Circle, North Naples
Grand opening of models will take place Nov. 2, but 15 percent of the homes have been presold. Homes are targeted to move-up buyers and empty nesters. The project is expected to be completed in 2014.
■ Builder and developer: Pulte Homes
■ When started: July 2013
■ Number of homes when completed: 150
■ Amenities: Heated pool; fitness center; half-court basketball; community gathering room; catering kitchen; outdoor barbecue grill; fire pit; pavilion, and covered verandah
■ Project size in acres: 60
■ Types of homes: 150 single-family homes
■ Price range: high $200,000s to low $600,000s
■ Square footage: 1,750 to 3,500
http://www.naplesnews.com/news/2013/jul/28/pulte-starts-construction-of-3-models-at-camden/
■ Esplanade at Hacienda Lakes, 8625 Collier Blvd., Naples
■ Land clearing began in mid-summer for the first residential parcel within the new 2,262-acre master planned community Hacienda Lakes. Built by Taylor Morrison, the 153-acre project will be called Esplanade at Hacienda Lakes. Pricing and home designs haven’t been set.
■ Builder: Taylor Morrison; developer: Hacienda Lakes LLC
■ When started: Models will open in early 2014
■ Number of homes when completed: 443
■ Project size: 153 acres
■ Types of homes: Villas and single-family homes with two or three bedrooms and two-car garages
■ Amenities: The master-planned community eventually will include clubhouses, sports courts, pet park, retail, offices, a hotel, a business park and a public school. About 1,500 acres will be preserve land.
http://www.naplesnews.com/news/2013/oct/20/clearing-underway-for-hacienda-lakes-first/
Isles of Collier Preserve, southwest corner of Bayshore and Thomasson drives, Naples
On the edge of Rookery Bay, the 2,400-acre master-planned community once known as Sabal Palm will preserve half of the land. Homes will have an Old Florida design.
■ Builder and developer: Minto Communities
■ When started: January 2013; seven models opening January 2014
■ Estimated buildout: 2024
■ Number of homes when completed: 1,600
■ Amenities: Clubhouse, pool, hiking and biking trails, kayak launch
■ Project size: 2,400 acres
■ Types of homes: Single-family and coach homes to start; later estate homes and multifamily will be built.
■ Price range: low $400,000s to mid $700,000s
■ Square footage: 1,621 to 3,995
http://www.naplesnews.com/news/2013/sep/09/groundwork-isles-of-collier-preserve-taking-on/
Maple Ridge at Ave Maria, 5000 Avila Ave.
The single-family homes are targeted to families; 50 have sold during preconstruction. Eight models will soon open; 10 different floor plans are offered with three-to-six bedrooms. Some lots have lake views.
■ Builder: CC Devco; developer: Ave Maria Development/Barron Collier Cos.
■ When started: June 2013
■ Number of homes completed: Four out of eight models will open in November, and four more by year’s end
■ Number of homes when completed: 1,500
■ Amenities: Clubhouse, 18-hole golf course, water park, lakes, sidewalks, parks, bocce and pickle-ball courts, amphitheater, picnic pavilions, playing fields, walking and bike paths
■ Project size: 618 acres
■ Types of homes: Two single-family collections with two- and three-car garages
■ Price range: Low $200,000s to mid-$300,000s, pre-construction
■ Square footage: 1,935 to 4,032
http://www.naplesnews.com/news/2013/aug/25/8-model-homes-underway-in-maple-ridge-at-ave/
Mirasol at Coconut Point, 8570 Evernia Court, Bonita Springs
The first phase of seven buildings in this community is sold out, as are four of six new buildings under construction. Buildout is anticipated in three years. About half of the homes have been sold.
■ Builder and developer: D.R. Horton
■ When started: September 2012
■ Number of homes completed: Seven buildings comprising 48 units
■ Number of homes when completed: 200
■ Project size: 23 acres
■ Types of homes: Two- and three-bedroom condos and townhouses, with one- or two-car garages
■ Amenities: Pool, hot tub, rock waterfall, fitness center, game room, community room
■ Price range: high $100,000s to mid $200,000s
■ Square footage: 1,244 to 1,655
http://www.naplesnews.com/news/2012/nov/09/big-land-deals-again-big-deal-in-southwest-says/
Talis Park, 16980 Livingston Road, North Naples
Former NFL player Syd Kitson and his partners bought the former Tuscany Reserve in 2011. Now 12 builders are creating homes along the Greg Norman/Pete Dye golf course. By January, phase one of the clubhouse, seven new models and 20 ready-to-move homes should be ready. The project should be built out in 2017. Ten percent of the homes have been sold.
■ Builders: Borelli Construction, Distinctive Communities, Divco Construction Corp., Fox Custom Builders, Gulfshore Homes, Harbourside Custom Homes, Harwick Homes, Imperial Homes of Southwest Florida, McGarvey Custom Homes, Randall Mitchell Companies, Sunwest Homes and Van Emmerik Custom Homes.
■ Developer: Kitson & Partners
■ When started: October 2012
■ Number of homes completed: 25
■ Number of homes when completed: 590
■ Project size: 461 acres
■ Types of homes: Villas and single-family homes
■ Amenities: 18-hole golf course, walking trails, bocce and tennis courts, pool, spa
■ Price range: $700,000 to more than $5 million
■ Square footage: 2,600 to 17,000
http://www.naplesnews.com/news/2013/apr/08/develop-kitson-revive-talis-park-collier-county/
Treviso Bay, 9800 Treviso Bay Blvd., Naples
■ The clubhouse and sports center are near completion. Lennar Homes is building condos to executive homes ranging from the low $200,000s to the upper $600,000s; Stock Construction will build 26 luxury homes in the first phase.
■ Developer: Lennar Homes
■ Project size: 1,050 acres
■ Amenities: Arthur Hills/Hal Sutton designed golf course, bocce and tennis courts, lakeside beach, clubhouse and sports center
■ Price range: Low $200,000s to millions
http://www.naplesnews.com/news/2013/sep/29/villa-rilissare-clubhouse-in-treviso-bay-nears/
Colony Golf and Bay Club, 4541 Coconut Road, Bonita Springs
This project is a gated condominium community within the Pelican Landing master-planned community.
■ Builder and developer: WCI Communities
■ When started: 2012
■ Number of homes completed: 825
■ Number of homes when completed: 1,352
■ Project size: 809 acres
■ Type of homes: Mid-rise condominiums
■ Amenities: Clubhouse with formal and casual dining; spa and fitness center; pool; tennis pavilion; beach park
■ Price range: Mid-$400,000s to mid-$640,000s
■ Square footage: 2,100 to 2,900
http://www.wcicommunities.com/colony-golf-bay-club/
Valencia at Spanish Wells, 28474 Tasca Drive, Bonita Springs
A model is under construction at this gated neighborhood, which is part of the Spanish Wells Golf and Country Club. Residents will have privileges at the Tarpon Cove Yacht and Racquet Club in North Naples.
■ Builder and developer: Toll Brothers
■ When started: July 2013
■ Number of homes when completed: 128
■ Project size: 54 acres
■ Types of homes: Single-family, all with a first-floor master suite
■ Amenities: 27-hole golf course, tennis center, pools, clubhouse, fitness center; yacht-club access
■ Percentage of homes sold: Not yet open for sales
■ Price range: $300,000s to $500,000s
■ Square footage: 2,000 to 3,000 square feet
http://www.naplesnews.com/blogs/bonita-and-beyond-jim-boeglin/2013/oct/11/housing/
More About Buying A Home:
The Housing Market Continues to Progress
Amid Falling Foreclosure Rates and Rising Prices, Trade-Up Buyers Are Coming Back
RISMEDIA, Thursday, October 10, 2013
How space is distributed in a new home is a frequently asked question. To collect information on this, NAHB recently surveyed its single-family builder members. The average percent distribution of finished space in the typical new home built by NAHB’s members is illustrated below.
In addition to an average breakdown of space in all new homes, NAHB looked at the breakdown for a small home (based on averages for homes under 2,000 square feet) and a large home (based on homes with at least 3,000 square feet).
Findings include the following:
Bedroom space accounts for just under 29 percent of floor space in new homes, irrespective of the overall size of those homes.
Bathroom space is allotted 12.3 percent of total floor area on average, with more space allocated in larger homes, and less in smaller ones.
The share of space covered by the laundry room—which is present in the vast majority of homes, irrespective of their size—is 3.7 percent and varies only to a minor extent with the size of the home.
Entry foyers account for 3.4 percent of the finished area on average.
Kitchens get about 11.9 percent of the space in small homes, versus 11.1 percent of the space in larger ones.
Dining areas account for 7.8 percent of the space in small homes and 7 percent of the space in larger ones.
The family room accounts for just over 11 percent of floor space in small, average, and large size homes, while the living room accounts for nearly 12 percent of the space in the small home and 7.5 percent in the large one.
Complete details, including tables showing how often builders include various types of rooms in new homes and the size of the rooms in square feet, are available in the October 1 Special Study published by NAHB inHousingEconomics.com.
View this original post on the NA
HB Eye on Housing blog.
More About Buying A Home:
Are You an Average Buyer?
Size of New Homes Continues to Edge Up
RISMEDIA, Thursday, September 26, 2013
According to recently released data from the Survey of Construction (SOC), the trend toward smaller home sizes, which started during the market downturn, has since reversed itself. In fact, since 2009, the median size of newly started single-family homes has increased steadily to a record high of over 2,300 square feet last year.
The SOC is conducted by the Census Bureau, partly funded by HUD, and the source of the familiar monthly series on housing starts. House size is one of several characteristics in the SOC data that NAHB analyzed in a recentHousingEconomics.com Special Study.
In addition to square footage, several other new home characteristics show an upward trend after 2009. The average number of bathrooms in new, single-family homes rose to a new high of 2.56 in 2012 following a period in which it edged down to as low as 2.20 in 2009. The average number of bedrooms in newly started homes also declined during the downturn, but has since very gradually increased.
The pattern of temporary decline in house size during a downturn followed by recovery and resumption of the upward trend has happened before—the last time coincident with the recession and recovery of the early 1980s. Many experts thought that the decline in the 2000s was due to factors that would prove to be more permanent, such as desire to keep energy costs down.
When the size of new homes began to rise again in 2010, tight credit conditions were squeezing many first time and other marginal buyers out of the market. As of 2012, housing markets had only recovered to a modest extent, so an atypical mix of buyers in the market could still be a factor behind the ongoing upward trend in the size of new homes.
View this original post on the NAHB blog, Eye on Housing.
More About Buying A Home:
That boom you heard is Southwest Florida building industry: It’s back
Naples Makes Top 10 Turnaround List
