Law Office of Ryan S. Shipp, PLLC

Palm Beach County Real Estate Blog

Why homeowners should sell in May

Florida residents who are thinking about putting their homes on the market should wait until May to do so. This is according to an analysis conducted by Zillow of 24 real estate markets across the country. The month of May was the best time to sell in 14 of those markets. One reason why this was the case was because there are fewer homes available for sale in the beginning of the spring season.

On average, homes in the study that were put on the market in May sold two weeks sooner. They also sold for an average of $2,400 more than if those homes were put on the market during other times of the year. The study did acknowledge that late April was best for sellers in the West. Furthermore, sellers in cities such as Pittsburgh and St. Louis should put their homes on the market in the second half of March and the first half of June.

Commercial real estate can be a rewarding investment

Florida investors may be interested in learning that commercial real estate can be an exceptional method of earning a passive, profitable stream of income. While a real estate investment can be different from typical securities like stocks or mutual funds, commercial real estate can be successful and secure as an ongoing investment and business opportunity. When selecting a project in which to invest, there are several factors an investor should consider in order to make the best choice for his or her portfolio and style.

Each commercial real estate project has a sponsor, developer or company that is acquiring a particular complex. Sponsors of a real estate project owe a fiduciary duty to their investors. This is one area in which a person's preferred type of investment comes into play. Experienced sponsors may forecast less ambitious returns but can also rely on a record of historic success that they wish to uphold. Less experienced sponsors may be able to forecast even higher returns but could also present a higher level of risk.

Strong demand among buyers driving up home prices

Many people in Florida view home ownership as a path to stability and an investment in their futures. In recent years, competition has forced people to exceed their budgets to get the houses that they desire. Compared to a year earlier, the S&P CoreLogic Case-Shiller home price index showed a 6.2 percent increase home prices for January 2018. Strong employment figures and a shortage of listed homes represent the main culprits forcing buyers into bidding wars on homes.

Millennial buyers go over budget the most often in this environment. Data gathered by revealed that 40 percent of them spent more than they planned by an average amount of $24,545. Priorities like living in a good neighborhood or close to work motivated their spending. Generation X and Baby Boomers have increased their budgets as well but not as much as younger buyers. Millennials feel pressure to buy a home because they may be living with parents or renting. Older buyers appear more willing to wait and save some money because they have more experience with home buying and likely already own instead of rent.

Legally removing unwanted tenants from your property

Florida landlords often face serious challenges when dealing with tenants. From late rent to property damage, you know it is important to understand how to legally deal with complications that may arise with your tenants. As a landlord, you may need to know what to do in the event you need to remove a tenant from the property.

Whether your tenant is not abiding by the terms of his or her contract or there is some other problem, there are occasions when it may be necessary to ask a tenant to leave. There are certain steps you have to take when doing this, and knowing how to approach this sometimes tricky issue can save you a significant amount of time and legal complications in the future.

Home sales rebound after slip

According to the National Association of Realtors, new home sales rose 3 percent in February after falling in December and January. Sales were up in states such as Florida in the South. Sales were also up in the West while falling in the Northeast and Midwest. However, the overall increase for the month is seen as a sign that the home market will be competitive heading into the spring months.

The median price for a home was $241,700 in February, which was a 5.9 percent increase from this time in 2017. Price increases have occurred thanks to a stronger job market that has increased demand for housing. It has also been attributed to fewer houses being listed for sale. Higher mortgage rates may cause some people to shy away from selling their homes, and that could push prices even higher over time.

Large real estate trusts continue growth pattern

Investment in residential and commercial real estate is continuing to grow in Florida and across the country, as major real estate investment trusts (REITs) continue to acquire and build new homes for generating rental income. The percentage of occupied rental homes in 2017 grew and is expected to continue to rise as even more rental homes are acquired and built by the large REITs across the country.

One major company in the real estate industry, Invitation Homes, added 34,670 more single-family rental homes after merging with Starwood Waypoint Homes in November 2017. Also in late 2017, the company bought and sold several hundred homes, for a total portfolio of 82,750 homes for rent. Another company, American Homes 4 Rent, has announced plans to spend $400 to $600 million in 2018 to build additional new single-family homes for rent. This REIT owned 46,996 rental homes at the end of 2017, a growth of 970 throughout the year. Its homes showed a high occupancy rate, with 95.7 percent currently leased to renters.

Commercial real estate provides shield against volatility

Florida investors may be wondering what the future holds for the commercial real estate market. After decades of regular double-digit returns, it seems that, on some levels, the market has slowed down. In 2016, the returns fell below the annual average of 10.1 percent for the first time since 2008's major economic crisis. In addition, some forecasts envision 6 percent returns for 2018 and 2019.

Of course, commercial real estate is a cyclical market, and upswings and downturns are a natural part of this type of investment. However, while the returns in 2016 are lower than those in previous years, it is unlikely to point to a significant downturn that could call into question the wisdom of continued investment in real estate. In fact, a 2018 report by Colliers International points out that the industry continues to expect ongoing growth, pointing toward a positive environment for investment.

Home sales lower as prices and rates rise

New home sales dropped 7.8 percent nationally in January to 593,000 units sold when seasonally adjusted. In the South, there was a 14.2 percent drop, and that includes states such as Florida. The Northeast saw a 33.3 percent drop in sales during the month of January. These two regions account for most of the new home purchases in the country. However, sales actually rose 1 percent in the West and 15.4 percent in the Midwest.

One reason why home sales may be slowing is a lack of available inventory. This is in spite of the fact that there was an approximate six month supply of homes available in January, which was the most since July 2014. At this rate, the supply of homes is roughly in a balance with consumer demand. However, as prices increase, it may push out those who are looking to buy homes at entry level price points.

Mortgage rates may impact buying decisions

People who are considering buying a home in Florida may need to contend with higher mortgage interest rates. The average rate for a 30-year fixed-rate mortgage was 4.38 percent in mid-February, which is the highest since April 2014. Mortgage rates generally increase in step with the 10-year Treasury notes, which are also trending higher. This is because investors are seeking higher returns as inflation picks up.

Higher interest rates may be a problem for first-time buyers who may already be discouraged by increasing home prices. Prices are heading higher partially because of a lack of available homes on the market. Since 2015, housing values have increased by as much as 7 percent, which is double the increase in the average hourly wage during that time period. The average cost of a home in the fourth quarter of 2017 was $235,400 according to the National Association of Realtors.

Buying a home? Find out if an easement will affect property use.

If you are purchasing a home in Florida, you know how important it is to be certain you know as much as possible about the property you hope to buy. This can help you avoid problems, reduce complications and save you both time and money in the future. One of the things you may need to know about is the presence of an easement.

An easement could affect the way that you enjoy and use your property. It can be frustrating to learn about an easement after the purchase is complete, but you can avoid this problem by asking questions and seeking information before the closing.

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