Here's the latest housing market report for Tampa. If you have any questions please contact me.
Here is the January housing market report for Tampa.
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If you are considering buying of viewing new homes in Wesley Chapel or anywhere in the U.S. you must watch this video. This is my updated new homes video where I added a section on how to save money in the design center.
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The majority of American homebuyers think they need to have a 20% down payment to be approved for a mortgage. In fact, in a recent National Association of Realtors survey, 34% of those that responded said they think they need over 20%.
Here’s what you may be surprised to learn – low down payment mortgages make up a large quantity of home buying every year. With the help of a private mortgage insurance (PMI), people who have five percent or less for a down payment can still buy a home. PMI has been available since the late 1950s, with more than 25 million families purchasing the home of their dreams.
In just the last year, the PMI had ensured that over 750,000 people were able to buy a home or refinance their mortgage. Many of these folks were first-time homebuyers with over 40% of them with incomes of less than $75,000.
How Does PMI Work?
Believe it or not, the private mortgage insurance process is extremely simple. When going through the mortgage underwriting process, the lender will verify employment and figure out how much a person can afford to pay each month. Lenders typically want homebuyers to put down 20% before the bank offers a loan. 20% shows the financial lender that the homebuyer is serious about the purchase.
PMI reduces the down payment gap, so borrowers who would normally get turned down for a loan will actually be approved for one.
4 Primary Benefits Of PMI
1. You can purchase your home sooner. It can be years before a person can actually save up 20% for a down payment. With the PMI, most buyers can purchase a home with a minimum of 3%.
2. It’s only temporary and will eventually result in lower monthly payments. Once 20% equity has been reached – through your making the payments or the home’s appreciation, the PMI is canceled. However, for FHA loans (the federal government’s PMI), the PMI is there until the loan is paid off.
3. It offers a multitude of flexible payment options. The lender may provide various choices for the PMI payment – the most common is the PMI being lumped into the mortgage payment.
4, You can deduct it on your taxes. There are income limits, but the PMI premiums are tax-deductible like the interest of your mortgage. Four million taxpayers took advantage of this deduction in 2014.
Private mortgage insurance is one of the easiest way to attain a mortgage with little down payment for a home. Plus, it provides an array of benefits to potential homebuyers. Due to its prevalence in the nation’s housing market, it has given millions of people the chance to become a homebuyer even when other financial obstacles stood in their way.
Note: You always want to talk to a tax adviser regarding income tax deductions.
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The small-scale owners of millions of rental homes, parcels of investment land and income-producing commercial and business real estate might not know it, but one of their key financial planning and tax tools is in danger of disappearing on Capitol Hill.
House Republicans are working on a major tax reform proposal that, as part of an overall streamlining of the Internal Revenue Code and reduction in tax rates, may eliminate or seriously restrict the use of tax-deferred exchanges – property swaps – under Section 1031 of the code. President Trump has identified tax reform as one of his top priorities, and legislation is expected to move quickly in the new Congress.
In a tax-deferred exchange, owners can postpone recognition of gains on investment real estate when they swap one property for another of “like kind.” The capital gains tax that would otherwise be due gets deferred until the owner sells the replacement property and receives cash.
Under IRS Section 1031, which has been part of the tax code since 1921, a rental house in Santa Barbara, California, might be exchanged for an investment duplex in suburban Chicago. Oklahoma farmland could be exchanged for rental condos in Washington D.C., Boston or Miami. Exchanges are also used to further environmental protection objectives, such as through swaps involving conservation easements to preserve habitat and prevent future development.
To qualify for tax deferral, exchanges must follow a detailed set of IRS rules specifying the timing for identifying replacement properties and transaction closing deadlines. An entire industry of “qualified intermediaries” exists to facilitate exchanges by escrowing proceeds and administering transactions to comply with IRS rules. Fixer-upper houses and other real estate held for short periods and then flipped to new purchasers do not qualify for tax deferred exchanges nor do owner-occupied residences.
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Loss of the ability to use an exchange would be a significant blow to “Mom and Pop” and other small-scale realty investors. According to a study posted on the website of the National Rental Home Council, there were 15.7 million rental homes in the U.S. as of 2015, and 99 percent of them were owned by non-institutional investors. A study by professors at the University of Florida and Syracuse University estimated that most exchanges involve relatively small properties; in 2011, 59 percent had a sale price of less than $1 million.
Bill Horan of Realty Exchange Corp. in Gainesville, Virginia, told me about recent transactions that illustrate some of the objectives of tax-deferred property swaps. In one, a rental property owner exchanged it for two Dollar General stores. The owner “didn't want to be a daily landlord anymore,” which involved hands-on management duties and liabilities, Horan said. By rolling his rental housing gains and equity into “triple net” leased retail properties, where the tenants essentially are responsible for everything, he was able to simplify his life, diversify his portfolio and potentially make greater gains in the future with retail real estate. Another small investor swapped a rental home in Virginia for a rental condo in Ft. Myers, Florida, where he intends to move for retirement.
“He wanted to own property near where he's going to live,” said Horan. Since the Ft. Myers unit cost $412,000 and the rental home he relinquished was valued at $525,000, the investor ended up paying a modest amount of capital gains taxes.
Exchanges have been on congressional tax writers' hit lists before, in part because they generate tax “expenditures” – losses of otherwise immediately collectible revenue for the federal government. In
December 2015, the congressional Joint Committee on Taxation estimated that during fiscal 2017, exchanges would generate tax expenditures of $11.7 billion attributable to corporations and $6 billion attributable to individual taxpayers. For the same year, by comparison, revenue losses caused by deductions for mortgage interest and local property taxes by individual homeowners were much larger – $84.3 billion and $36.9 billion, respectively.
Exchange proponents, such as Suzanne Baker of Investment Property Exchange Services in Chicago, argue that most of the deferred taxes ultimately are collected when properties get sold for cash, and that exchanges stimulate economic activity – redevelopment and upgrades of properties for example – that would not occur if owners faced immediate taxes on their gains and therefore simply sat on them.
Bottom line: If you own investment real estate, and have contemplated a Section 1031 exchange, be aware: There's a significant possibility that tax reform could knock your plans off track. Keep a close eye on what's happening, because it could happen fast.
4 Bedrooms – 3 Full Bathroom – Den – Bonus Room – Oversized 3 Car Garage – 3,142 Heated Sq. Ft.
Priced to sell at $499,900
When only the best will do! This pristine Custom Built Home is Simply Stunning and Beautiful * Located on the Best Home Site in Fish Hawk Trails – Private, Pie-shaped, Conservation Lot * Very Open & Bright Floor Plan * A Chef's Dream Kitchen Overlooks a Solar Heated Pool, Gas Spa and a Wooded .62 Acre Lot * The Kitchen Features Granite Counters, Stainless Steel Appliances, Island, Raised Panel Maple Cabinetry with Under Lighting, Gas Cooktop and a Large Pantry * The Attention to Detail and Upgrades are Amazing: 12’ Ceilings, Plantation Shutter Throughout, Rounded Corners, Pocket Slider, Art Niches, Plant Ledges… View more information at www.youtube.com/watch?v=NHQMSQK5VFg.
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Many local markets need an uptick in new-home construction to meet buyer demand and counter housing shortages. But the home building industry is facing a big challenge in meeting that call: They can't find enough skilled workers.
The Bureau of Labor Statistics Job Openings and Labor Turnover Survey found that nearly 200,000 construction industry jobs are unfilled across the country – an increase of 81 percent in just two years. Unemployment in the construction industry is at 4.5 percent, the lowest in a decade, putting increased pressure on foremans, project managers and developers.
In some cases, builders are even forced to stretch delivery times for the homes they're building by weeks or even months.
“The shortage is worse than you've heard,” says George C. Hess III, CEO of Vantage Homes Corp., which operates in the Colorado Springs area. Vantage Homes builds, on average, 120 to 150 homes a year. Hess says they could have done 20 more units last year if they had more workers.
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Many workers fled the industry following the housing downturn; and when the market rebounded years later, the industry discovered that many of those workers didn't return. The financial challenges of a labor shortage have an even harsher impact on low-end housing because the challenge entices more builders to devote most of their attention to luxury projects to help recoup the added costs from delays.
The lack of trained labor in the residential construction industry is “far and away” the number one issue facing the home building industry today, says John Courson, president and CEO of the Home Builders Institute.
“There's been a pretty solid drumbeat for the last few years,” he says. “But I've never seen it rise to the crescendo it did last month. It's a huge shift from the halcyon days of homebuilding between 2000 and 2006.”
The industry is starting to invest in vocational education in response to the labor shortage. For example, HBI is focusing on educational programs that target at-risk youth, ex-offenders and veterans to help these populations find immediate job opportunities that don't require a college degree.
HBI is also pushing for more vocational programs at high schools to help students partner with professionals for internships.
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There was a time that people wanted granite countertops, but it appears that time has come and gone. Today, more and more folks are choosing the look of quartz for their kitchen countertops.
Why People Are Choosing Quartz Over Granite
According to Case Executive Vice President Bill Millholland, 75% of the design build firm’s clientele is choosing quartz to granite. He said it’s because people want a contemporary look in their kitchen, which is something quartz can provide. Millholland said granite is more for traditional looks.
What makes quartz so much better is that it’s harder and isn’t as porous as granite. It provides homeowners with better color consistency, is resistant to stains and doesn’t demand regular maintenance as is commonly seen with granite or marble.
According to Jennifer Gilmer, a kitchen designer in Chevy Chase, Md., most of her customers would rather have quartz because modern kitchens are all the rage. She said people don’t want a lot of pattern in their kitchen, which is something quartz can provide.
Gilmer said quartz’ most popular colors are black, gray, white and off-white.
She said quartz manufacturers have developed many options that offer a marble-look, and they’re selling a plethora of these styles.
What People Can Expect To Pay For Their Countertops
Stone and Tile World Vice President Eddie Castro said people who want to install quartz countertops will pay for the look, as they have a range of $65 to $135 per square foot, which includes the installation and fabrication. He said non-exotic granite has a price range of $50 to $60 per square foot while marble runs from $55 to $95 a square foot.
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I want to go over the best way to get your home to appraise. At least the best possible way to get your home to appraise.
We've been running in low appraisals for a number of years and homes not appraising. The best thing that you can do to get your home to appraise is to make sure your real estate agent meets the appraiser at the property and have them pull up detailed information justifying the value. What tends to happen is a lot of these appraisers are coming from all over the area.
For example, I live in Tampa. I might have a home that I listed and sold in New Tampa. Maybe the appraiser's coming from 45 minutes away. They don't understand the market. They don't understand which builders built the homes. They don't understand or never even been in the subdivision before. Make sure your real estate agent goes out there and meets them.
I just had an agent a couple of weeks ago and what happened is she had some documentation that showed the home was larger than it was but it didn't show up that large in the tax roll. The tax roll showed 2,500 and something square feet. Her documentation had over 2,700 square feet. She didn't meet the appraiser, she didn't give him this, and it came in substantially lower because the appraiser was using different comparables. So just make sure that your real estate agent meets the appraiser out there.
Some appraisers won't even really talk to realtors. They won't even take the information or the documentation. But make sure your real estate agent meets them and tries to give them the information. At least, hopefully, they'll have the realtor's card. And if they can't find comparables, maybe they'll give the real estate agent a call. They're really supposed to do this, they should do this, but a lot of appraisers don't.
It comes down to getting an agent that really understands what they're doing and understands the market, understands your subdivision, et cetera. This is the best thing you can do. There are no guarantees. If the lender ordered the appraisal through a management company, you're almost pretty much dead in the water.
If they've ordered it through VA, if the buyer was a veteran and they're going through the veterans administration, that's good news and it's one of the reasons why I love VA loans – it's because you can appeal the appraisal two times. Keep that in mind and make sure your agent keeps that in mind when you're getting offers. I have purposely accepted offers from veterans and suggested the seller do this just for this reason and it's come back to reward us.
Anyhow, I hope this helps you. If you have any questions on real estate in the Tampa market, please don't hesitate to give me a call. Have a wonderful day and best of luck with your home appraisal.
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If you have ever wondered how long you have to think about buying a home, here's a video that will give you some information to think about. View this video on my YouTube channel at www.youtube.com/tampa2enjoy.