Residential Market Insights: May 2016

cropped-lido-waterfront-home_thumb.jpgHOME SALES

The median home price was $222,700 in March, which was up 5 percent from February and up 5.7 percent from last year. The median home price has increased by approximately $12,000 in the past year alone.

HOME PRICE

The National Association of REALTORS® reported home sales at a seasonally adjusted annual rate of 5.3 million homes during the month of March. This was an increase of 5.1 percent from February, and an increase of 1.5 percent from March of last year. Currently, 2016 is projected to outpace 2015 by approximately 720,000 total home sales.

INVENTORY – MONTH’S SUPPLY

There was a 4.5-month supply of housing inventory in March, up from 4.4 months in February. The total number of homes for sale in March increased by 2.3 percent to 1.98 million homes nationwide, but that was still 30,000 fewer listings than March of last year.

CURRENT MORTGAGE RATES

The following is a summary of the current mortgage rates:

May 2016 Mortgage Rates

Source: This Month in Real Estate

Thinking of buying or selling real estate?

KW1784102f20KWYou should consider using a realtor.  If you are interested in buying real estate (new home, existing home, or commercial property), please contact me (Alan Lane with Keller Williams Realty at 2119 W Brandon Blvd, Brandon, Florida  33511).  As a life long resident of Central Florida, I can help you find the right property for you whether it is in Lakeland or as far south as Sarasota.  The Keller Williams offices of  ”Suburban Tampa” include the offices in Brandon, Plant City, Fishhawk Ranch, and our newest office in Valrico.  My email address is alanlane66@gmail.com, or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for real estate opportunities on my website at this link.

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Potential Redevelopment Site within an Infill Area of Brandon, Florida

kellerwilliamsrealty_logo_5x3We have an approximately 15 acre site with a private stocked pond (estimated at approximately three acres of the overall site). Currently, the property is improved with two custom built homes, 3,500 and 2,600 square feet, plus a 2,500 square foot Game Room/Lodge with full amenities. The property also includes a barn, four horse stable, three wells, the entire property is perimeter fenced. The property has potential for operation as a youth camp or redevelopment into a residential development. This property is located in the highly desirable northern Brandon area with easy access to major highways to the entire state. The property is zoned ASC-1 with Future Land Use of R-4 (six units per acre). The property also has public utilities running along Taylor Road to the east of the subject site.

15 AC Youth Camp Site

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Offered at only $1,500,000, this is a great opportunity to run a youth camp or to develop it into a small subdivision. If you are interested in this property or any other property, please do not hesitate to contact me.

rubricThinking of buying real estate?  You should consider using a realtor.  If you are interested in buying real estate (new home, existing home, or commercial property), please contact me (Alan Lane with Keller Williams Realty at 2119 W Brandon Blvd, Brandon, Florida  33511).  As a life long resident of Central Florida, I can help you find the right property for you whether it is in Lakeland or as far south as Sarasota.  The Keller Williams offices of  ”Suburban Tampa” include the offices in Brandon, Plant City, Fishhawk Ranch, and our newest office in Valrico.  My email address isalanlane66@gmail.com, or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for real estate opportunities on my website at this link.

Benefits of Homeownership

During this time of year, the financial benefits of homeownership are evident with write offs for mortgage interest, real estate taxes and some closing costs deductions likes points on a new loan (or origination fees). There are other benefits to home ownership like the following:

1. Buying Is Cheaper than Renting In the Long Term

Although in the first few years, it may be cheaper to rent. If you don’t take money out (i.e. by refinancing the property), over time as the interest portion of your mortgage payment will decrease the principal portion (or equity portion) that you pay will eventually be lower than the rent you would have been paying. Your equity in your home is the amount of money you can sell it for minus what you still owe on it. But most importantly, you are not paying your landlord’s home or building’s mortgage, you are paying off your own property!

2. Homeownership Builds Equity Over Time

Although this past decade of real estate market’s bust has reduced homeowner’s confidence, it is why it’s so important the new “Qualified Mortgage” rules versus some of these liar loans of the past where you did not have to prove that you had the financial means to pay the mortgage payment. The way mortgages work is that the principal portion of your payment increases slightly every month year after year. It’s lowest on your first payment and highest on your last payment. Thus, your equity grows the faster that you pay off the loan!

3. Mortgage Tax Deduction Benefits

  • Mortgage deduction: The IRS tax code allows homeowners to deduct the mortgage interest from their tax obligations. This can be a huge deduction and can make the difference between claiming a standard deduction versus itemized deductions. Most people look at this benefit as one of the best benefits of home ownership.
  • In addition to your mortgage interest, you can deduct the interest you pay on a home equity loan (or line of credit).
  • Some closing cost deductions: The first year you buy your home, you are able to claim the points (also called origination fees) on your loan, no matter whether they are paid by you or the seller.
  • Property tax is deductible: Real estate property taxes paid are also deductible on your primary residence and a vacation home is for income tax purposes.

4. Capital Gains Exclusion

If you buy a home to live in as your primary residence for more than two years then you will qualify. When you sell, you can keep profits up to $250,000 if you are single, or $500,000 if you are married, and not owe any capital gains taxes.

5. Appreciation

Homes have traditionally been considered a safe investment, with values that rise moderately over time.  According to the NAR (National Association of Realtors), “the national median home price has risen every year (even during recessions and periods of sales declines) since 1968. Typically, the values appreciate at the rate of inflation, plus 1 or 2 percentage points. Sometimes it’s a greater increase. In 2004, for instance, the median price went up by 9.4 percent.”

6. A Mortgage Is Like a Forced Savings Plan

Paying a mortgage every month and reducing the amount of your principal is like a forced savings plan. Each month you are building up more equity in your home. In a sense, you are being forced to save assuming the market remains stable.

If you are interested in buying a new home or an existing home, please contact me (Alan Lane with Keller Williams Realty at 2119 W Brandon Blvd, Brandon, Florida  33511) and I can help you find a new home in the Tampa Bay Area.  The Keller Williams offices of  ”Suburban Tampa” include the offices in Brandon, Plant City, Fishhawk Ranch, and our newest office in Valrico.  My email address is alanlane66@gmail.com, or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for homes on my website at this link.

Flood Insurance Reform

Bonita Springs Ryan HomesThe Biggert-Waters Flood Insurance Reform Act of 2012 is a law passed by Congress and signed by the President in 2012 that extends the National Flood Insurance Program (NFIP) for five years, while requiring significant program reform. With over 24 billion in debt, the national flood insurance program has been heavily subsidized by taxpayers. Biggert-Waters imposed 25 percent rate hikes on some, but not all properties that have received premium subsidies through the National Flood Insurance Program. The FEMA program has traditionally charged premiums at about 40-45 percent of their full cost, with the balance paid (subsidizing the rest) by the taxpayers. Additionally, there is some states that pay significantly more in premiums more than they pay to cover damages. For example, Floridians paid $3.60 in flood premiums for every $1 that came back to cover damages. On the other hand, Mississippi receives $5.00 in claims for every $1.00 paid in premiums.

On March 21, 2014, President Obama signed the Homeowner Flood Insurance Affordability Act of 2014 into law. This law repeals and modifies certain provisions of the Biggert-Waters Flood Insurance Reform Act of 2012. This reform caps the annual premium increases at 18 percent. In addition to capping annual increases at 18 percent, the bill allows people buying homes covered under the federal flood insurance program to pay the subsidized premium rate at first, rather than the higher rate reflecting true flooding risk.

Most people do not realize that the flood insurance program is subsidized. This makes me wonder why we have been subsidizing flood insurance coverage for homeowners who build or buy in high-risk areas anyway.  I can understand that the dramatic change in flood insurance can have a drastic affect on the home owners and probably home values.  Thus, I agree with a gradual increase in flood insurance premiums.

If you are interested in buying a new home or an existing home, please contact me (Alan Lane with Keller Williams Realty at 2119 W Brandon Blvd, Brandon, Florida  33511) and I can help you find a new home in the Tampa Bay Area.  The Keller Williams offices of  ”Suburban Tampa” include the offices in Brandon, Plant City, Fishhawk Ranch, and our newest office in Valrico.  My email address is alanlane66@gmail.com, or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for homes on my website at this link.

Mortgage Forgiveness Debt Relief Act for 2014?

Summit-Front-Elevation.jpgAlthough some homes are still recovering their values before the economic collapse from their highs in 2006 and 2007, there are some neighborhoods that will not regain their values for years to come.  In Florida, this is especially true in some areas of Tampa Bay.  This leaves a lot of home owners upside down.  In other words, their home values are less than their mortgages.

In 2007, Congress passed the Mortgage Forgiveness Debt Relief Act to help people who loss of their homes. This act was passed to help former homeowners from getting a large tax bills after short Mortgage-debtselling their homes.  A short sale is “a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts and where the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.”[1]

Benefiting both the property owner and lender, a lot of people have taken advantage of a short sale rather than letting their home become foreclosed upon.  A short sale will have less of an impact on your credit score than a foreclosure.  If the lender does not have to foreclose on the home (saving the lender on attorney fees, carrying costs, maintenance expenses, etc.), most lenders will waive the deficiency judgment against the previous property owner.  However, the lender does not have to waive the deficiency judgment.  Although a lender might forgive the deficiency judgment, the property owner is still liable to get a tax bills after short selling their homes.  In other words, the former property owner losses his home and the lender allows the borrower to accept a price that is less than the amount owed, but the borrower has to pay taxes on forgiven debt because it isn’t money that was earned.  For example, someone owes $150,000 on a home but can only sell it for $125,000. The difference, $25,000, would be considered taxable income. The Mortgage Forgiveness Debt Relief Act allowed the borrower to have this debt to be forgiven (Up to $2 million of forgiven debt qualified for the exclusion).  It looks like this act is not going to be extended for 2014.

If the Mortgage Forgiveness Debt Relief Act is not extended for 2014, I predict that more people will just opt for foreclosure and stay in their homes longer rather than short selling their homes.  This will cost lenders a lot of money and delay a housing recovery.Sandpiper.jpg

If you are interested in buying a new home or an existing home, please contact me (Alan Lane with Keller Williams Realty at 2119 W Brandon Blvd, Brandon, Florida  33511) and I can help you find a new home in the Tampa Bay Area.  My email address is alanlane66@gmail.com or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for homes on my website at this link.

1 “Real Estate Short Sale”. Investopedia. Retrieved 13 April 2012.

Keller Williams “Suburban Tampa” Exceeds its Goals!!!

Keller Williams Realty

Keller Williams Realty (Photo credit: Wikipedia)

Congratulations to Keller Williams Realty Brandon/Plant City also known as “Keller Williams Realty Suburban Tampa”, which has outperformed Hillsborough County MLS by 31% for Listings taken and 67% for closed units based on year-to-date sales figures. The November statistics are as follows:

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Keller Williams Realty “Suburban Tampa” has exceeded its goals and is looking forward to another record setting year in 2014.  If you are interested in buying a new home or an existing home, please contact me (Alan Lane with Keller Williams Realty at 2119 W Brandon Blvd, Brandon, Florida  33511) and I can help you find a new home in the Tampa Bay Area.  My email address is alanlane66@gmail.com or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for homes on my website at this link.

Just Sold for Full List Price in Lake St. Charles in Riverview, Florida

Lake St Charles Sunrise

Lake St Charles Sunrise (Photo credit: Tangled Web Photography)

Lake St. Charles is a residential subdivision located in Riverview (Tampa Bay), Florida.  Riverview is located south of Brandon along the Alafia River and has seen tremendous amount of population growth due to the built out nature of Brandon and its easy access to both Interstate 75 and the Selmon Crosstown Expressway. Most of the residential growth has been in single family residential developments.  Lake St. Charles features amenities like a 70 acre lake, swimming pool, tennis courts, sand volley ball court, basketball court, playground, miles of trails for walking and biking, community activities and more.  For a video tour of the development’s amenities, please click the following video: Lake St. Charles

IMG_0731Swimming Pool at Night

Typically, there is a slow down in the number of transactions during and leading up to the Holidays in November and December.  This is due to the fact that most people do not want to move during the Holidays.  This is especially true for families with kids.  However, the Lake St. Charles development is showing significant demand due its amenities and desirable location.  I have looked at other communities within suburban Tampa that have not had the same amount of demand.

I sold this home for full list price.  There are currently only seven homes available in this subdivision.  If you are interested in buying a new home or an existing home, please contact me (Alan Lane with Keller Williams Realty at 2119 W Brandon Blvd, Brandon, Florida  33511) and I can help you find a new home in the Tampa Bay Area.  My email address is alanlane66@gmail.com or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for homes on my website at this link.