Why own a home? The American Dream is owning your home! The benefits of homeownership are stability, privacy, comfort, a sign of prosperity, peace of mind and a place to express yourself. Right now most homeowners are seeing a major appreciation in the equity of their homes. If you have owned your home for 2 years and it is your primary residence, a big part of your profit does not get taxed. For married taxpayers that own a home and file jointly $500,000 is exempted. For an unmarried owner, $250,000.00 is exempted from capital gains tax.
The Fed raised its benchmark interest rate on June 15th 2022 by three-quarters of a percentage point - 0.75% — the biggest hike since 1994. That follows a quarter-point increase in March and a half-point jump in May. Yes, we are seeing the mortgage rate climb again with this new hike from the Federal Reserve. The days of the 3% mortgage are in the past and now a more normalized 6% rate is occuring.
Covid 19 gave housing a turbo boost with high pricing and a supply chain of low inventory. Now, the mortgage rate is accelerating at very high speeds. Sellers in South Florida have not adjusted their listing price. The pricing that seems to be lowering is the pricing from the start that has never had comparables. The price was too high to begin with. Why own a home? The American Dream is owning your home! The benefits of homeownership are stability, privacy, comfort, a sign of prosperity, peace of mind and a place to express yourself. Right now most homeowners are seeing a major appreciation in the equity of their homes. If you have owned your home for 2 years and it is your primary residence, a big part of your profit does not get taxed. For married taxpayers that own a home and file jointly $500,000 is exempted. For an unmarried owner, $250,000.00 is exempted from capital gains tax.
Another interest rate raise - The Fed raised its benchmark interest rate on June 15th 2022 by three-quarters of a percentage point - 0.75% — the biggest hike since 1994. That follows a quarter-point increase in March and a half-point jump in May. Yes, we are seeing the mortgage rate climb again with this new hike from the Federal Reserve. The 3% interest rate evolved to combat a depression that was ready to occur. The days of the 3% mortgage are in the past and now a more normalized 6% rate is happening.
What I am seeing lately is the issue with roofs. South Florida roofs are becoming older. Most insurance companies will usually give a shingle roof a life span of 15 years and a tile roof 30 years. The biggest obstacle is the condition of the roof. A roof must be leak proof and have a remaining life expectancy of at least 3 years for insurance to apply. A roof must be leak proof for an appraisal to work. Cracked tiles need replacement and loose tiles need to be repaired but this seems to be more of an issue for the buyer and the insurance companies. You will need a roof inspection and a wind mitigation report when purchasing a home. Most roofs also need gutters.
Competition is still strong in South Florida because the housing inventory in South Florida is very low. Currently the months of inventory is 1.5 Months. A normal market is 6 to 9 Months. Out of 1431 closed sales, 410 sales were from cah buyers. Home buyers are dealing with bidding wars and paying over the asking price to live in their desired location. This is the state of today's housing market. The 6% mortgage rate has not affected real estate in South Florida. Buyers have been taking away inspection contingencies and appraisal contingencies. There is an escalation clause that automatically increases your purchase offer by a certain amount above all competing offers. A higher down payment or increasing your earnest money (the deposit made when you make an offer) shows the seller that you are serious and becomes a more attractive offer. If an appraisal comes in low, a second appraisal can be ordered.
If you see a home you like, please act quickly and call Susan Penn 954-557-5993 to set up a showing.
