Amy Snook answers a popular question on divorce and real estate. Before you make a decision on buying or selling, let’s have a conversation. We would love to educate you and come up with the right plan to help you sell or buy a home in this specific scenario! Amy Snook & Noreen Payne 561-571-2289
There are many variables that make September results interesting! The final results and evaluation of the next few months are going to be critical to really ascertain and give guidance on our Palm Beach County market.
First, the week leading up to now, Ian, as you can imagine, caused a pause in most of Florida’s market – the path of the Hurricane was unclear and therefore most sellers and buyers chose to wait before taking any action on their real estate decisions. Further, for any buyer under contract to close on a home in September, if they had not yet bound their new insurance policy, insurance agents were unable to complete the process therefore causing closings to be delayed. The above skewed, of course, new listings coming on market, buyers going under contract and closings for the month of September.
Another variable, though may also be the trend for our future, is that we are back to season in our market. Historically and prior to our pandemic years, we saw a drop off in summer months and the market did not typically pick back up until we approached our season – October, November timeframe. For the past 3 years or so, we were strong 12 months of the year with many people desperately wanting to relocate or purchase a second home in south Florida. The lifestyle we offer in Palm Beach County fueled the real estate market. With September’s results showing a decrease in almost all categories across the board, we need to wonder if we are back to “seasons” of real estate in Florida or were we simply impacted by the Hurricane.
Yet another aspect is mortgage rates. Cash sales were down again this month which means more people are financing the homes they are buying. With interest rates higher than we have seen in many, many years and the threat of continued increases in those rates, we know that people are looking at lower price points than they did one year ago, and others are simply not able to purchase or purchase what they want and are holding off for now.
All three (3) of the above variables impacted our September results, we will be closely monitoring the next few months to really ascertain whether we are back to prepandemic market seasons and how much the interest rate will impact our unique market.
With all of that said, Noreen and I had a very busy September with both listings and buyers going under contract. I share that because I do think it is worth mentioning – when homes are priced properly, and buyer expectations are also set upfront – homes move. People still want to sell and people still want to buy but realistic expectations are critical and the market is clearly indicating this fact.
In EVERY price point which we evaluated, months of inventory crept up by at least one month – $600- $900 and then $1,000,000 and up – is officially in a balanced market – for $1,000,000 we are actually approaching (on the cusp) a buyer’s market – but from a recommendation perspective of our team – we caution anyone to get too confident and treat the $1,000,000 and up price point as a balanced market. Too many factors impacted September results to change strategy at this point; however, we currently have the most inventory at every price point over any month in 2022.
I hesitate to share specific numbers as almost ¼ of our month was impacted by the Hurricane (Ian) and we don’t feel that these numbers are truly an indication of where our Palm Beach market truly stands – cash sales down, median and average price points down, new listings and new pending are down as well and inventory was up almost 68% from this time last year.
All of the above said, we are extremely confident that our market is still very, very attractive and is a highly sought-after place to live, work and play. While this month we experienced a shift, we believe it was a temporary shift (as to the degree of which we shifted). We will not continue, at this time, to see unsustainable growth in price points but we will see properties moving at price points higher than the pre-pandemic times.
Our greatest advice in this market, choose your real estate partner wisely😊
Based on June numbers, our Palm Beach County July market report is proving to be very interesting. If you watch, the media is touting doom and gloom for real estate around the country – and while things have definitely slowed from the frenetic pace that we’ve experienced over the past few years, the Palm Beach real estate market is far from doom and gloom. In fact, as we’ve stated in our past reports these last few months, when marketing properly and priced appropriately, homes are selling…period!
HOWEVER, our reality is that the market that “was” is not the same now. That market was unsustainable, and we all needed it to soften a bit. Inventory was lacking at all price levels but we now have more inventory! Demand is still high and with inventory increasing, Buyers have more choices. Now more than ever, when Buyers have options, Sellers need to pay more attention to how their home looks, how it is priced, and how it is marketed. If you have been reading our reports you know that one of the leading indicators of the market is inventory – if nothing new came to market – how many months would it take to “consume” all that is available – you also learned that a balanced market is 5-7 months of inventory; below 5 is a seller’s market and above 7 is a buyer’s market. While under $999,000 is still a Seller’s market – our months of 1 or 2 months of inventory has now reached 3 and 4 months of inventory – inching towards a balanced market. Over $1,000,000 – is sticking at 5 months – low end of balanced but nevertheless balanced.
So, what makes this interesting? Well, as expected, the higher interest rates have cooled the market (at varying price points), certainly hasn’t stopped the market but rather slowed it down. For the first time within the past year, June results show that year over year results have declined. As it relates to closings, last June happened to be higher than normal but we cannot ignore the fact that the astronomical increases have ceased. Closed sale numbers are similar to pre-pandemic numbers; however, prices are up substantially.
In Palm Beach County, prices remain strong but the price points are responding to the increase in inventory. There are simply more options for people. Driving around we see more signs – we see more price reductions – we have more competition.
So, Buyers, this is the first month in sometime that we are reporting good news – there are more properties!
Sellers, it continues to be very good news for you as well. Buyers are still relocating to our area! Price properly, ensure marketing is firing on all cylinders and ensure you partner with a Realtor or Team who knows how to get you to the closing table. Given that there is more inventory, buyers may exercise their right to cancel under inspection. Experience and Finesse is needed to keep deals together .
Looking for the right partners? The Amy and Noreen Team of Lang Realty are ready to spend time with you, educating you on the market and rolling up our sleeves to continue doing what we do best!
Noreen tells buyers why it’s important for them to be at inspection.
A seller asked Noreen and Amy how they will know buyers who viewed their home is qualified to buy. Great question. Get the answers here!
Ever wonder how we find the right home for our buyers? Noreen gives you an inside peek into her tried-and-true process in this short video. She explains how she helps her buyers hone in on the neighborhood and the home that is just right for them!
Is it better to choose a home with an HOA (homeowners association), or one without and HOA? Noreen reviews some pros and cons and offers some help with making this personal decision.
Working with Buyers in a Covid-19 Environment
By: Noreen Payne
Sitting at my desk and pondering the path forward during this time of social distancing and virtual work during Covid-19, I wonder how things will be different in our personal residential real estate business once we make it through these challenging times. But, for now, the focus is on how we continue to serve our buyers who are not only wanting to buy a home but also have to. Like many of our colleagues, we’re also looking at ways to conduct our business virtually. When it comes to our buyers, for now the days of picking them up in our cars and face-to-face interaction are on hold. Those of you who know me know I’m missing those personal moments immensely!
That said, I’m finding that using tools such as FaceTime, Zoom, App Files, Video and Virtual tours can also go a long way toward building a solid relationship. In fact, we’ve just closed on a new home purchase with a buyer who has never set foot in the home they just bought! Though this is the first time we’re weathering a pandemic, this isn’t the first time we’ve done this. Remote contact can be a common way for buyers to purchase, especially investors who trust us with their goals.
In the case of our recent close, we started in the classic Residential Real Estate fashion, doing what we do best. The fact-finding process, once done in person, can be handled via conference call. During the call I asked a lot of questions and did even more listening. Then I created the usual searches and shared them over email—after which came the usual back and forth feedback, mostly done via virtual tours, photos and a few FaceTime calls.
Working in this manner with our buyer, we actually found the perfect home in no time! I set the showing with the listing agent and luckily the home is vacant and on a SUPRA, therefore, no contact/no touch deemed necessary. Over FaceTime the buyers and I took our time going through every inch of the home, down to the street on which it’s located. We negotiated the deal and went under contract. At the time of inspection, I met the inspector, who we know very well. As a side note: It’s my firm belief that having trusted partners working with you at all times is a must! I unlocked the door for the inspector and reconvened with the client over FaceTime to give them the update. Obviously, many more things can happen prior to closing. In this case, we met General Contractors, interior designers, landscapers, plumbers, electricians, and more. It was a great help having an agent on the listing side who was incredibly accommodating and a pleasure to work with. In these days of Covid-19, our spirit of teamwork is being put to the test. Now more than ever, we’re all pulling together in the best interest of our clients to ensure smooth closings like this one.
In this time of uncertainty, my initial reaction was to withdraw—even marketing didn’t feel right. But, I believe these days the reality is that our clients now need our support more than ever (of course at a safe six-foot distance).
About Noreen Payne
Noreen Payne is a partner in the All About Florida Homes team of Lang Realty. She and her co-partner, Amy Snook, provide concierge-level real estate service in South Florida. She is currently Chairman of the Board for the Delray Beach Chamber of Commerce and is on the Board of Directors for The Achievement Center for Children & Families, and is an active volunteer with The Caring Kitchen.
1. My company’s offices are closed, and I am having a hard time providing my final verification of employment within the 10 days prior to loan closing.
FHA and RHS are allowing verbal verification of employment. Specifically, your employer can provide this by phone. RHS is also allowing email verification. If you cannot get either of these, the lender will require higher reserves to cover risk.
Fannie Mae and Freddie Mac will allow verbal verification when available and an email verification under certain conditions. They have also made other forms of temporary verification available in order to help with verification while social distancing
2.My lender indicated that the IRS has shut down and they cannot process loans without an income verification document that only the IRS can generate. Is this true?
Luckily, there is precedence for an IRS shutdown based on several recent government shutdowns. Some lenders may require this document, but Fannie Mae, Freddie Mac, and FHA do not so this is a lender overlay.
Fannie and Freddie both issued guidance in January 2019 following the previous government shutdown to note that they do not require the 4506T IRS tax transcripts at closing. Rather, they only require a request for the document be signed by the borrower. However, they do require the tax transcript be submitted as part of their post-closing review. NAR has asked both Fannie and Freddie to clarify and publish updated guidance given the unique challenges posed by COVID-19.
Furthermore, the IRS reopened this facility during the shutdown as it was deemed essential. We have reached out to the IRS on this point.
- I have heard that the FHA, Fannie Mae, and Freddie Mac have raised rates and fees on borrowers with lower credit scores or smaller down payments?
These claims are not true. To date, neither the FHA nor Fannie Mae and Freddie Mac have made any changes to credit scoring or down payment requirements. The only change they have made for borrowers is to allow MORE flexibility in how a lender can verify employment.
However, some individual lenders are adding their own, higher standards on these products. The rational is that the cost of servicing these loans has surged due to the widespread forbearance that is taxing servicers’ resources. Under forbearance, the servicer must continue to pay PITI to the investor, but the sheer volume of forbearance to deal with the COVID-19 response is unprecedented. Since lower-credit borrowers are more likely to take forbearance and servicing is harder to get, lenders are less willing to extend this credit regardless of the FHA or GSEs’ standards.
NAR sent a letter to the Treasury, Federal Reserve, and the Federal Housing Finance Agency requesting help for servicers dealing with the unprecedented demands on funds due to broad forbearance requests. Improving servicing is one key to improving the flow of funds to borrowers and homeowners.
Ginnie Mae has announced the creation of a new program, that should help alleviate lender concerns and improve access to mortgage financing. The program will provide cover for lenders by advancing them the money so they can make the required pass- through payments to investors during the forbearance period.
AMY STARK SNOOK,
Phone | 561-571-2289
Amy and Noreen Team