Posts

No one has been building since 2007

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Buyers often come to me looking for a newer home here in Ocala. I often tell them that no one has been building homes here since the market crash in 2007. Of course it isn’t true that no one has built anything since 07 but there has been very little building. Builders simply can’t compete with the prices of resales.

Here are permits for single family homes by the year to illustrate my point.

2004  4,611

2005  5,601

2006  6,026

2007  2,139

2008    933

2009    316

2010    399

2011    325

2012    359

 

What you want may not exist

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My web site and blog attract a lot of out of the area buyers. It’s not my job to find a buyer exactly what they want. I feel it is my job to show them what is available here in Ocala for their budget. For example there are a lot of people who’d like a $150K farm. Can I find one ? Well that depends on your definition of a farm. If you mean a mobile home on a couple of acres of agricultural zoned land then yes you can get a farm here. I also get buyers looking for a 55+ community with a big lot and almost no HOA fees. Is it impossible ? No but it does eliminate 98% of the 55+ listings. Feel free to contact me about anything to do with Ocala real estate but just be aware that what you want doesn’t always exist.

Home Inspections

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The purpose of a home inspection is to find a problem so large and costly the buyer might not want to buy the house. Or in some cases so many problems that add up to so much money that the buyer might want to back out of the deal. Home inspections aren’t intended to create a laundry list of repairs to make a home like new again.

One problem I encounter is that home inspectors as a courtesy provide maintenance suggestions in addition to needed repairs. The difference in repairs and cosmetic items is defined in the Florida real estate sales contracts but that doesn’t seem to help with the confusion.

The way that repairs are defined in the Florida RE contract can cause problems. For example a 20 years old roof that doesn’t leak but is at the absolute end of it’s life doesn’t need to be replaced. The same with termites. A seller can make repairs up to 1 1/2% of the purchase price. You might just want to walk away but the contract locks you in.

In certain circumstances like the above examples it’s better to use an AS IS contract that let’s you out of the deal for any reason regarding the inspection or you can use a right to inspect right to cancel addendum.

Newer Ocala area homes

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I constantly get buyers looking for newer homes. The market crashed here in 2007. This is the Great Recession. There has been very little building here since the crash. Why you ask? Resales are priced below what it costs to build new. So far below that builders can’t compete. Land has gone down in price but no new large scale planned communities have been started since 07. Building materials aren’t much cheaper. Most sub contractors have gone bankrupt or cut back to much smaller companies.  A couple of retirement communities that were started before 07 are building but not much else. New home building won’t get going again until prices go up. It’s just a matter of economics.

Ocala house hunting

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I get people who want to make a quick pit stop and check out a house or 2 on their way to a cruise ship or Disney. I assume this is unique to Florida but I think it’s a waste of time. A cross country move is a big deal and requires extensive planning. I know I moved all the way to Ocala from the western mountains of Maine. You shouldn’t even bother looking at houses in a city you’ve never been to. You should pick the city first. Then look for few communities in that city. Finally you look at houses.

Ocala and Marion County Florida deed restrictions

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I get a lot of questions about deed restrictions here in Ocala and Marion county. Deed restrictions are public records. This blog post will show you how to find deed restrictions here in Marion County.

1. Go to the Marion County Clerk of the Courts web site.

2. In the lower right under Records click on Official Records Search

3. On the right click Search Records Now a blue box

4. At bottom of the page use Legacy Web Search

5. Enter party name. You have to get the name exact

6. Under restrict document type by code enter RES which is restrictions and covenants

Deed restrictions can be hard to read. Some were written before computers and are old typed documents that were poorly scanned. Larger older communities can have 100’s of pages mostly of very minor revisions. Typically you will find the important stuff in the largest document.

How to establish fair market value

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I spend about 95% of my time as a buyers agent here in Ocala. One question that comes up is “what should I offer?”. I suggest that a buyer look at comparable sales to come up with an offer. A good comparable would meet the following criteria.

same sub division

sold in the last 90 days

within 1 mile of subject property

+/- 10% of the sq ft of living area

same # of beds, baths and size garage

+/- 5 years in age, 10 years if home is over 10 years old

same construction type

All this above can be used by a buyer to come up with an offer on a home or it can be used by a seller to find a proper list price. In the end it doesn’t matter what a buyer or seller thinks a house is worth. What matters is the price that similar homes have sold for in the past 90 days. Sellers should keep in mind that in order for a buyer to get a loan a bank will send out an appraiser who will use very similar criteria for an appraisal.

New home sales in Ocala Florida

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I often get buyers looking for newer homes here in the Ocala Marion County area. Many are interested in a new or newer Ocala 55+ retirement home. I end up telling these buyers that there has been very little building here since the market crashed in 2007. The reason for this lack of new construction is that resales are selling at prices below the cost of new construction and in some non retirement communities much less.

The below survey is based on active listings on the Ocala Marion county MLS as of July 7, 2011

Total residential listings 3915

new homes dated as 2011…..19

homes from 2010-2011………32

homes from 2009-2011………55

homes from 2008-2011……..114

homes from 2007-2011……..311

homes from 2006-2011……..571

homes from 2005-2011……..769

What does this all mean? It means that despite the fact that vacant land is available at fire sale prices and Marion County has suspended impact fees on new homes, builders still think it’s not worth trying to compete with newer resales. This is the time to but a house in Ocala.

The above numbers include both 55+ communities and non retirement communities and all types of construction including mobile and manufactured homes. They do not include homes offered by builders that are not listed on the OMCAR MLS.

Ocala real estate a once in a life time opportunity

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Right now is the opportunity of a lifetime to buy an Ocala home. Here are 12 reasons to invest in Ocala real estate right now.

1. Interest rates are at historical low with no where to go but up.
2. Many Ocala area home sellers will pay part or all of a buyers closing costs.
3. Fannie Mae Homepath Financing doesn’t require an appraisal and also offers renovation loans for their Ocala and Marion County foreclosed properties.
4. USDA offers 100% financing with no Private Mortgage Insurance (PMI) on many Marion County homes. Mostly homes that are not in the Ocala city limits.
5. FHA loans allow the seller to pay many of the buyers closing costs.
6. Conventional loans rates are at all time lows. Local banks want to loan money to buyers with good credit. Don’t let anyone tell you different.
7. Foreclosures are selling at a 50% discount from 2005-08 highs.
8. Most Ocala foreclosures are in good condition and easily pass a professional home inspection.
9. Many “traditional sellers” have dropped their prices to better compete with distress sales.
10. In the 55+ communities there are always great deals on estate sales.
11. Estate sales also exist outside the 55+ communities and are a hidden secret often over shadowed by Ocala area foreclosures and short sales.
12. Principle, interest, taxes and insurance are often not much more than renting.

If you are a first time buyer, a renter, a retiree or investor now is the time to buy.

Even a new house isn’t always a perfect house.

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I just helped a couple get a really great deal on a brand new house from a developer in Dunnellon Florida. Now some people might think that spending good money on a home inspection for a new house that comes with a builders warranty is a waste of money. Well while testing the dishwasher it spilled water all over the kitchen floor and it took the poor home inspector about a half hour to soak all the water up with some old towels he carried with him. The buyers were paying cash and there wasn’t a bank that required a survey but they elected to do one any way even though this was a new house. There are wild stories about building houses on the wrong lot. The survey revealed a minor error on the title that was corrected prior to closing. Not a big deal but something that would have surfaced on resale.
A waste of money or money well spent? You be the judge.