What’s A Pool Worth?

How to value a pool comes up a lot in my work with buyers and sellers. Putting in a new pool averages about $80,000 but appraisers do not value pools based on their cost. Typically, if a buyer wants a home with a pool, it is more economical to buy a home that already has a pool rather than add one. Since we are in Florida, one might think that pool homes would be in abundance. However, finding homes with pools is not as easy as you might think in St. Pete.

Right now, there are 766 single family homes for sale in St. Pete priced under $500,000. 84 of these homes have an in-ground pool. Furthermore, only 33 of these homes are not in a flood zone. I had two different appraisers gave me their guide for making home valuation adjustments. For a home priced at $250,000, one appraiser gives $8,000 – $15,000. If the pool has a screened enclosure, they add another $5,000. Another appraiser’s guide stipulates a $12,000 – $25,000 adjustment and also another $5,000 for a screened enclosure.

Working with buyers and sellers, I have had a sense that pools are reflecting a higher value to buyers in the St. Pete market than just a $15,000 adjustment, so I took a closer look at the statistics.

In the last 6 months (October 2018 – March 2019), 111 single-family homes with pools that aren’t in a flood zone sold under $500,000.

Data calculated on all homes recently sold under $500,000 with an in-ground pool:

Average sale price Average sale price/SF
       With pools – not in a flood zone  $299,000  $186.13
       With pools – in a flood zone  $329,000  $198.13
 Without pools – not in a flood zone  $204,798  $166.01
 Without pool – in a flood zone  $248,500  $178.oo

 

Pools homes definitely sell for more. Based on my analysis, in-ground pools add $50,000 – $80,000 to a home’s value.

This leads me to another point – homes in St. Pete that ARE in a flood zone sell for more. Obviously, waterfront property commands a higher price. However, many of the homes in a flood zone aren’t actually waterfront. Some of the nicer neighborhoods in St. Pete are close to the water. In those neighborhoods, you also find homes that were built later than their counterparts built in the 20s, 40s & 50s and these homes have larger square footage, garages and POOLS! The central parts of St. Pete tend to be older and were not built with pools.

Posted on April 1, 2019 at 11:08 pm
Michelle Anderson | Category: Home Buying, Real Estate Market, Selling Your Home, St. Petersburg

Why is Title Insurance Needed?

Title-Insurance-Policy

Title insurance “insures” the title of the property. Title insurance makes the title marketable and insures the homeowner against claims to the title. Examples of title issues are claims from prior heirs, instances of bad foreclosures and prior liens such as construction or tax liens.

For example, a friend of mine bought a bank-owned house in Maryland that had been foreclosed on. After she did extensive renovations on the house, it was discovered that the prior foreclosure had been improper. The former owner was not provided with the due process that is required to foreclose a home. This occurred during the housing recession when large numbers of homes were being foreclosed on and there were many instances of process and paperwork errors. Luckily, my friend had title insurance that protected her, and the problem was resolved (and not at her expense).

Most buyers will not buy a house without title being insured. And, the vast majority of lenders require that both the buyer and seller have title insurance. The title policy purchased by the buyer protects the buyer and the lender while the seller’s policy protects the seller.

So for sellers – a seller’s policy is required unless you have a cash buyer, and even cash buyers often want title insurance. There’s nothing that makes it mandatory for the seller to pay for the owner’s policy, however, it is customary and requiring the buyer to pay it would be a disincentive to the buyer. After all, they are already paying for their own policy. I personally have not encountered a seller asking for a buyer to pay for both policies.

Other closing fees fall under recording & transfer taxes and doc stamps and are government fees. The title company that handles the closing and conducts all the liens searches, obtains title policy and holds the escrow funds also has a closing fee of a few hundred dollars. A seller’s title policy is typically $5.75 per every $100,000 of the sale price plus $5.00 per every $1,000. Recording and transfer fees to the seller are typically .70 cents per every thousand dollars. When working with sellers, I provide an estimated closing statement that details these fees.

Posted on January 22, 2019 at 7:30 pm
Michelle Anderson | Category: Home Buying, Selling Your Home | Tagged ,

When Is the Best Time of Year to List a House in Pinellas County?

by Michelle L. Anderson, MBA, REALTOR, RE/MAX Metro

Most of the year, Florida enjoys an active real estate market. Unlike states to the north that are not active in cold winter months, Florida benefits from our fabulous winters and our snowbirds. The short answer to this question is that late winter – early summer are the BEST times to put a house on the market. But the only time I advise sellers to NOT list a house is the 2nd half of December through the first week of January. The reality is that real estate activity slows to a crawl during the holidays. However, at any given time there are lots of people who need to move and homes sell all year longThere are a few things to consider when defining what is the “best” time, because is it best to sell the fastest, or at the highest price or do these factors coincide?

I looked at the numbers for Pinellas County for 2014 – October 2018* to see exactly what the sales trend looks like by month. Below is a graph that shows the number of closed sales for each month. Keep in mind that homes that closed likely went on the market two months prior. The average days homes have been on the market in the past year is 26 days and on average, most contracts close in 30 days.

You will see that sales consistently spike in the spring and summer. They also consistently die down in the fall and have a short spike again right at the end of the year. I hypothesize the end of the year spike is due to people making purchases prior to the end of the year in order to qualify for homesteading or investors looking to acquire a tax deduction. Another factor may be people from up north looking to buy in time to enjoy their new home for the winter.

Number of closed single family home sales, Pinellas County Florida

 

Absorption Rate

The absorption rate is pretty much what it sounds like. It is the rate that listings are selling and it is calculated by dividing the number of closed sales by the number of active listings. A lower rate means that homes are selling slower (buyer’s market) while a higher rate means that homes are selling quickly (seller’s market). One of the highest rates in recent years was 44% in June 2016 and I can attest to encountering numerous bidding wars for homes at that time.

When the absorption rate is going up, sellers can list their homes at a higher price. However, when the absorption rate is declining, homes shouldn’t be listed at a higher price. In other words, a declining rate indicates that it isn’t a time to “push the market higher,” and that demand is decreasing.

Absorption Rate – Pinellas County Florida, Single Family Homes, real estate statistics

 

From 2014 – 2018, the absorption rate has been trending upward. The rate also seems to follow a similar pattern with the number of listings, the number of sales and the median sales price. Homes that are on the market over the holidays sit the longest and the absorption rate tends to peak for the year in the spring and summer.

Appraisals
Home appraisers do factor absorption rate into their valuations. This means that when the rate is climbing, they may add additional value to a home. However, when the absorption rate is declining, they are less likely to increase value for market factors.

Sales Price
While the median sales price has been trending upward at a high rate over the last few years, the trend is not a perfectly straight path. Below are some charts that show the median sale price by month. Interestingly, each year the highest median price for the year occurs in the spring/early summer and dips down in the fall with another small spike prior to the year end. This trend mirrors the trends of the number of closed sales, number of listings and days on market.

How much difference in price does it make? An article on CNBC says that on average, homes that sell at peak times sell for $1,500 more. The article also says that the best time to list homes in warm weather markets like Florida is March.

Median Sale Price, Single Family Homes, Pinellas County, Florida 2014-2018

Median Sale Price, Single Family Homes, Pinellas County, Florida 2018


Days on Market / Median Time to Contract

The median number of days homes were on the market prior to going under contract follows a similar trend with the longest average time falling around the holidays and beginning of the year and then declining until reaching a low point in early summer.

Median Time to Contract – Single Family Homes, Pinellas County Florida, Days on Market, 2014, 2015, 2016, 2017, 2018

Pinellas County, Florida Real Estate Statistics, January 2018 – October 2018

Want to know what day of the week is best to put a house on the market? Visit my previous blog: Best Day to List a Home

 


*Numbers as reported from the Pinellas Realtor Organization. Statistical calcualations and analysis conducted by Michelle L. Anderson

Graziosi, Dean. “What Is Absorption Rate in Real Estate and Why Is It Important?” Huffington Post 12/6/17 0

Olick, Diana. “Homes sell fastest during these two weeksCNBC. 3/2/2017

Posted on December 18, 2018 at 4:26 pm
Michelle Anderson | Category: Real Estate Market, Selling Your Home, St. Petersburg | Tagged , ,

Best Day to List Your Home?

 

Best day to list a house for sale

The day your home is listed on the market does matter.

When working with sellers, I always try to schedule the listing to go live during the middle of the week. So when I stumbled on this article that substantiates this practice, I decided to turn it into a post to reinforce this practice.

This article explains that listing a home in the middle of the week allows for optimal showings and statistics show that houses listed in the middle of the week actually sell for a higher price. The timing allows the home to be included in buyers scheduled showings over the weekend and allows for timely scheduling of open houses.

When a home is listed over the weekend or early in the week, it does not allow for buyers to schedule weekend showings. This equates to wasted days on market and statistics show that the longer a house is on the market, the lower the sales price is. When selling a home, it is ideal to hit the market running and make every day count.

Want to know what time of year is best to put a home on the market for sale? Read my blogpost – When is the Best Time of Year to List a House for Sale?

Read the full article

Posted on November 1, 2018 at 4:20 pm
Michelle Anderson | Category: Selling Your Home | Tagged , ,

What Does a “Seller’s Market” Really Mean?

Back to Econ 101 and Supply & Demand –
Most of the nation is currently in a seller’s market and has been for some time. While it may seem obvious this means that the market favors home sellers over buyers, what does it really mean?

A seller’s market means that there are more buyers than sellers active in the market. The inventory of homes is low. This creates a competitive marketplace where homes sell at a faster rate and often get multiple offers on the same home. This is also contributing to the increase in home prices (think supply and demand). In a seller’s market, buyers have less bargaining power. Currently, a buyer may feel they don’t have an abundance of homes to chose from and in some cases are waiting for new homes to come on the market.

To gauge just how strong of a seller’s market we are in and what direction the market is heading, look at the month’s supply of inventory. The industry standard for a balanced market is 5.5 months of inventory. The statistics below are provided by Florida Realtors (Association).

Pinellas County (St. Petersburg/ Clearwater) – Median Sale Price & home inventory

Pinellas County Home Sales March 2018

The above chart shows that the median sale price for single family homes in Pinellas County have gone up 8.7% in the past year and the inventory has gone down 14.8%. The median sale price of condominiums and townhomes went up an ever greater amount of 14.4% and the inventory was down a whopping 17.6% over the prior year.

Pinellas County Real Estate Inventory – March 2018

To read more on a seller’s market, read my Blog “The Best Time of Year to List a House for Sale,” which explains the absorption rate and it’s correlation to seller’s and buyer’s markets.

Posted on June 12, 2018 at 6:33 pm
Michelle Anderson | Category: Home Buying, Real Estate Market, Selling Your Home, St. Petersburg | Tagged , , , , ,