As the weather warms up, so does the Vero Beach real estate market, and experts say this year's spring selling season is shaping up to be an active one. Beth Braverman with The Fiscal Times penned an article recently that points out the trends to watch in 2015, whether you're buying or selling.
2015 Vero Beach Real Estate Trends
1: Vero Beach real estate prices are rising, even hitting record levels in some places. Home prices nationwide rose by 5.7 percent in January, compared to a year ago, according to CoreLogic.
2: Mortgage rates are still low — for now. At less than 3.7 percent, mortgage rates haven't been this favorable to consumers since 2013. Rates are expected to rise as the year progresses, for now these rates are really at very low levels. To be safe, once you've got a closing date, consider locking in your mortgage at today's rock-bottom rates.
3: It's still a seller's market. Total housing inventory at the end of February increased 1.6 percent to 1.89 million existing homes for sale, but that's still 0.5 percent less than a year ago. Unsold inventory is at a 4.6-month supply, giving sellers a slight advantage in today's market. (A six-month supply is considered a healthy market.)
4: Buyers want turnkey properties. Even with tight inventory, buyers are looking for properties that are move-in ready and won't require much more than a coat of paint.
5: Foreclosures are no longer a factor. After peaking in August 2006 just before the housing bubble burst, foreclosures are on pace to return to historic norms this year, according to RealtyTrac. Foreclosure filings fells 4 percent in February to their lowest level since 2006.
6: Investors are backing off. Ordinary buyers in recent years often found themselves competing with investors. Today's houses are getting less desirable for investors because price points are going higher, so it doesn't pencil out as much. The share of homes going to institutional investors or all-cash buyers dropped in 2014 to the lowest level in four years.
7: In most places it's much cheaper to buy than to rent. Soaring rents in recent years have made buying Vero Beach real estate much more affordable for those who want to stay put than renting it. Nationally, U.S. renters spend an average of 30 percent of their income on rent, versus just 15 percent of income on mortgage payments, according to Zillow.
8: Credit is getting looser. Fannie Mae and Freddie Mac have introduced new lending programs that allow borrowers to put just 3.5 percent down on a home – although this comes with risk, of course. The Federal Housing Finance Agency recently reduced the cost of mortgage insurance by half a percentage point, which will save home buyers an average of $900 per year. All of this makes it a little bit easier for first-time buyers to qualify for a home loan.
9: New homes are smaller and greener. The average new home in 2015 was expected to be about 2,200 square feet, or 10 percent smaller than the average new home five years ago, according to the National Association of Home Builders. Millennial buyers and downsizing boomers want a smaller carbon footprint and a more eco-friendly home with energy-efficient windows and plumbing.
You can read the full article here.
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Getting a Vero Beach home inspection is not just for buyers after the sale. If you're selling, getting a Vero Beach home inspection before you even list is super important. In a effort to get the sale finalized in a short period of time you may be tempted to forgo a Vero Beach home inspection. This is a bad move and should never be omitted from home listing procedure.
Reasons a Vero Beach Home Inspection is Important Before Listing
There are a number of reasons why a Vero Beach home inspection is important before even listing your home for sale. One of the chief reasons is that it helps your buyers to view you as an honest seller. This makes the process more amicable as fears of being swindled are reduced.
Home inspections are required by law in some jurisdictions. This means that selling without getting one may void the contract. In this case it's better to err on the side of safety so if you are not certain what the laws in your area require, get the inspection done. It is better to be safe than sorry.
Getting a Vero Beach home inspection done also protects your interests. It may uncover previously undiscovered advantages in your home that enhance its value. This gives you more power at the bargaining table. Imagine being able to increase your asking price by a hefty sum because your home inspector discovered something new about the home. The home inspector can also offer tips on improvements that need to be made and these improvements may enable you to increase your asking price.
On the flip side, getting a Vero Beach home inspection can serve as a heads up. If glaring serious flaws, such as a damp foundation, are highlighted you can decide to get them repaired before placing the unit on the market or reduce your asking price to compensate for the flaw. Failure to do this could lead to you wasting your time and efforts as buyer after buyer turns down your home after getting it inspected themselves and determining that for the asking price there are simply too many flaws. You are also protected from asking for an unrealistic price and having the unit avoided like the plague because of a ridiculous asking price.
You are also protected from unfounded post sale claims by a Vero Beach home inspection. This means that if a fault emerges after the sale and your home inspection report does not support this flaw then the buyer cannot approach you for repairs to be done. Many times a seller is pummeled by requests to make repairs and adjustments to solve problems that simply did not exist prior to the sale of the property, and they have no grounds on which to claim that the faults are new. You don't want to be forced to use the proceeds of the sale of your home to pay for renovation to a home that is no longer yours.
So before you finalize that deal for the purchase of the home you selected from among the many attractive homes on the market, call a Vero Beach home inspector to check out the property you are trying to sell. Protect yourself and your family from unnecessary problems.
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With nine out of 10 home buyers now using the Internet at some point during their search, it's no wonder that "Web Appeal" has been called the new curb appeal for helping you sell your Vero Beach house. That puts a premium on the photos that you use in your online property listing.
3 Ways to Get the Best Shots to Sell Your Vero Beach House:
Use the Right Camera – You might think your smart phone takes great pictures, but online home buyers aren't likely to agree. An advanced camera is best for real estate photography because its larger sensor takes clear pictures even in low-light home interiors. That can pay big dividends. In a December 2013 study by online real estate brokerage Redfin, homes listed between $200,000 and $1 million that were shot with DSLR cameras sold for $3,400 to $11,200 more than those photographed with basic point-and-shoot cameras.
Tell the Whole Story - Buyers pay more attention to photos than the actual property description in the listing, so it's important to provide every visual detail. Include photos of each room, as well as the exterior and yard. And take close-ups of interesting features, such as a stone fireplace or high-end appliance. Natural light is always best, so you may need several days to capture every shot when getting the best photos to help sell your Vero Beach house.
Time it Right – It's best to debut a listing on Thursday or Friday, ahead of the weekend open houses. Make sure you have all of the pieces in place before going live because listings get 4.5 times more traffic in the first week than they do a month later. Some sellers (and agents, too) make the mistake of debuting a listing without the photos, thinking they'll upload them later. By that time, many would-be buyers will have moved on.
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The Federal Housing Administration (FHA) is exploring alternative credit scoring models for those seeking Vero Beach mortgages. The alternative credit scoring models could expand access to mortgage credit for responsible borrowers who may have thin credit histories or extenuating circumstance like medical debt.
Many Unable to Obtain Vero Beach Mortgages
Due to restrictive lending many of the qualified Vero Beach borrowers are not able to enter the housing market because they can't get Vero Beach mortgages.
The National Association of Realtors (NAR) first called on federal regulators and the credit and lending communities in 2011 to reassess the entire credit structure and look for ways to increase the availability of credit to qualified borrowers who are good credit risks.
Work by the Harvard University Joint Center for Housing Studies indicates that borrowers with lower incomes as well as minorities face higher rejection rates on applications for Vero Beach mortgages. A NAR analysis of mortgage data from 2007 to 2013 indicates that the share of rejected loans due to credit scores was significantly higher for African Americans and American Indians.
The newer credit scoring models put less emphasis on the impact of unpaid medical bills, and the effect of missed payments on debts that have subsequently been paid off is eliminated. FICO 9 and VantageScore 3.0 incorporate public utility and rental housing payments, information that helps lenders to evaluate younger persons and minorities who might not have a history of credit use. FICO estimates that its new model could improve scores by 25 to 100 basis points.
The biggest limitation to borrowing is tight credit standards. These conditions are exacerbated by outdated credit scoring models that don't take into account the unique spending and savings patterns of Hispanic borrowers. Alternative credit scoring models need to consider these patterns so creditworthy borrowers are not turned away from obtaining Vero Beach mortgages, and along with that, the American Dream of homeownership.
We will keep you posted right here on our website about this potential change in scoring by the FHA, and how it may affect those trying to get Vero Beach mortgages.
There's a potential new roadblock on the horizon that could wreck havoc with the Vero Beach housing market, just when it's pulling out of its worst downturn in decades.
Changes to Forms Could Affect the Vero Beach Housing Market
On August 1st, the new TRID (TILA-RESPA Integrated Disclosure) forms replace the HUD-1 Settlement and Good Faith Estimate. The Consumer Financial Protection Bureau's mission is to rebuild the mortgage banking landscape so the industry will avoid the type of conditions that led to the Great Recession. The CFPB replaces the Department of Housing and Urban Development for oversight because HUD did not provide specific consumer protection.
The new rules will require a new three-day waiting period when there are any changes in the TRID forms. The recommendation is to allow an extra 15 days to close a transaction. In other words, 30-day contracts will now require 45 days, and 60-day contracts will require 75 days.
Clients, agents and attorneys are accustomed to routinely making changes at the closing table and still closing the sale on the same day. The new three-day waiting period will severely limit this practice for items covered in the TRID documents.
So who will be affected the most when it comes to the Vero Beach housing market? Maybe the moving companies.
When transactions don't close on time, it's quite common for one or more of the principals to be stuck with furniture on a moving van and nowhere to go. Anyone who has experienced this situation knows how nasty this situation can get.
If there are multiple properties involved, any delay on one home's closing could delay others from closing as well. Now imagine how much more complicated this could become if there is an error that retriggers the three-day TRID waiting period. Everyone will be scrambling to handle late closings — not just for one day, but for at least three days or more.
Other potentially costly issues that could affect the Vero Beach housing market include situations where one of the principals must close by a certain date to take advantage of the tax breaks on the sale of their primary residence — or situations where one of the principals is involved in a 1031 tax-deferred exchange. The lost tax-benefit costs of a late closing could run into hundreds of thousands of dollars.
It doesn't take a rocket scientist to also figure how rate locks on mortgages could be severely affected. A buyer locks in an interest rate for 60 days. There is an increase in interest rates. This means the lender can no longer sell the buyer's loan on the secondary market. As a result, the lender demands additional documentation. The documents are submitted in a timely matter, but the underwriting department takes days to get to the changes. In the meantime, the buyers' interest rate lock expires, and the property doesn't close on time. At this point, the lender requires a higher interest rate in order to close the transaction.
Beginning to get the picture on the ripple affect all this could have on the Vero Beach housing market?
As we creep closer and closer to the August 1st changeover date, there will be unexpected delays in obtaining loan approval, potential changes in the documentation during the transaction, and a host of problems we probably can't even begin to imagine. Stay tuned, we'll update you again as the time draws closer.
Get more information as it pertains to the Vero Beach housing market in our section on Vero Beach Real Estate to your right under Vero Beach Real Estate Categories.
Remember, we post tips daily to Twitter, and also on our Facebook Page. We'd love you to check us out there too.