Real Estate Cycles
Real Estate Cycles Recovery, Expansion, Hyper Supply, and Recession The four phases of the real estate cycle are recovery, expansion, hyper supply, and recession. Real estate cycles are influenced by global crises, population disparity, interest rates, and overall economic health. What are the 4 phases of the real estate cycle? The real estate life cycle follows four phases that we’ve cycled through many times throughout history. Remember, while these phases are in a numbered list, they’re a part of a constantly spinning cycle. So, despite its place at the start of the cycle, the recovery phase is considered the bottom. This is because after the recession phase, the market itself is considered to be at its lowest. Let’s take a look at the four cycles of real estate: Recovery Expansion Hyper supply Recession Recovery: While the recovery phase is often listed as the first phase, the real estate cycle is circular, meaning that the recovery phase occurs after the recession phase. In the recovery phase, the real estate market begins at a low point from the recession phase—occupancy and rental rates are low, and new construction slows—and gradually rises in strength. If there is any rental growth, it occurs below the rate of inflation. For individual homeowners or renters, the recovery phase can be challenging to differentiate from the recession phase because the market will look much the same; experts look at trends like gradual occupancy increases or growing demand to identify when the recovery stage has begun. The recovery phase is a popular time for real estate investment and speculation since prices of properties are low (especially for distressed properties that need renovations), so the potential eventual return on investment from operation or resale is high. Recession: In the recession phase, supply has over-exceeded demand, and demand plummets—causing high vacancy rates and negative rent growth (or rent growth below the rate of inflation). Some opportunistic investors will look for accessible investment opportunities during this phase since properties will be at rock-bottom pricing (especially foreclosures). They then wait until the real estate cycle circles back, and the downturn is over—as the market begins to recover and eventually expand. Hyper supply: In the hyper supply phase (or oversupply phase), the supply will finally catch up and exceed high demand as previously started construction projects continue to wrap up. Vacancies will rise, and rent growth will slow. During this phase, some real estate investors will buy properties from companies that are nervous about the impending recession and eager to sell at a more attractive price. These investors will then wait until the expansion phase to sell (often called the buy and hold approach). Another common investment strategy is to invest in a tenant building that’s at capacity and has long-term leases in place since it will continue to bring in a steady cash flow during the coming recession. Expansion: In the expansion phase, the real estate market is completely recovered from the recession phase and is very strong. When the real estate market expands, vacancy is low, rent rates are high (and rising), property values are high, and new construction is typical to see. The expansion phase is a standard time for real estate investors to buy new rental properties or renovate old buildings since the demand is high and new tenants are usually easy to find.
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The Lowdown on Buying a Home in an HOA Community
The Lowdown on Buying a Home in an HOA Community What is the primary purpose of a homeowners association? The primary purpose of a homeowners association (HOA) is to govern and manage a residential community or neighborhood. HOAs are typically formed by developers when they create a new community, and they establish a set of rules, regulations, and guidelines that all homeowners within the community must follow. The specific purposes of an HOA can vary, but some of the common objectives include: Maintenance and Management: HOAs are responsible for the maintenance, upkeep, and management of common areas and amenities within the community. This can include landscaping, roads, parks, pools, fitness centers, and other shared facilities. Preserving Property Values: HOAs aim to maintain and enhance property values within the community by enforcing rules and standards related to property appearance, architectural guidelines, landscaping, and other factors that can impact the overall aesthetic and appeal of the neighborhood. Community Regulations: HOAs establish and enforce rules and regulations to promote a harmonious living environment. These can cover a wide range of areas such as noise restrictions, parking regulations, pet policies, and guidelines for property alterations or additions. Dispute Resolution: HOAs provide a framework for dispute resolution among homeowners, including conflicts between neighbors or violations of community rules. The association typically has a process for handling complaints, enforcing regulations, and resolving disputes. Financial Management: HOAs collect fees, known as assessments, from homeowners to cover the costs of maintaining common areas, providing services, and managing the association. They also create and manage budgets, collect dues, and handle financial matters related to the community. Community Engagement: HOAs often organize community events, social activities, and neighborhood gatherings to foster a sense of community and encourage resident involvement. This can include holiday celebrations, block parties, or special interest groups. It's important to note that the specific purpose and scope of an HOA can vary from one community to another. Before purchasing a property in an HOA community, it's advisable to carefully review the association's governing documents, including the bylaws, covenants, conditions, and restrictions (CC&R), to understand the specific responsibilities and limitations imposed by the HOA. When deciding between buying a property in a homeowners association (HOA) community versus a non-HOA community in Florida, there are several factors to consider. Here are some key points to help you make an informed decision: HOA Communities in Florida: Regulations and Rules: HOAs typically have rules and regulations that govern the community, which can include guidelines on property appearance, landscaping, parking, pet restrictions, and more. These rules are designed to maintain a certain aesthetic and preserve property values. Amenities and Services: HOA communities often provide amenities such as swimming pools, fitness centers, parks, and community events. These amenities can enhance your quality of life but come with associated fees. Maintenance and Repairs: In an HOA community, the association is responsible for maintaining common areas, such as landscaping, road repairs, and sometimes even the exterior of buildings. This can relieve individual homeowners of certain maintenance tasks but may also involve additional costs. Fees and Assessments: HOAs charge fees to cover the costs of maintaining the community and providing amenities. These fees can vary widely and are typically paid on a monthly or annual basis. Additionally, special assessments may be levied for unexpected expenses or major repairs. Community Governance: HOA communities have a board of directors or a similar governing body that makes decisions on behalf of the community. This can provide a structured framework for addressing issues, but it also means that homeowners must abide by the decisions made by the board. Non-HOA Communities in Florida: Flexibility: Non-HOA communities generally offer more flexibility when it comes to property use and modifications. You may have the freedom to customize your property as desired, subject to local zoning and building regulations. Cost: Typically, non-HOA communities have lower upfront costs since there are no regular HOA fees to pay. However, it's important to consider that the responsibility for maintaining common areas and amenities will fall on the individual homeowners. Independence: Without an HOA, you have more independence and control over your property. You won't have to adhere to specific rules and regulations set by an association.: Shared Responsibilities: In non-HOA communities, homeowners are typically responsible for maintaining their own properties, including landscaping, repairs, and other maintenance tasks. This can be time-consuming and may require additional costs. Ultimately, the decision between an HOA community and a non-HOA community depends on your personal preferences, lifestyle, and financial considerations. It's important to thoroughly review the HOA documents and rules, understand the associated costs, and assess whether the benefits and restrictions of an HOA community align with your needs and preferences. The Tatum Praise Team is more than happy to help guide you through the home buying process and advise you in the best direction possible. Contact Tatum at 813.528.1121 to start your house hunting journey today!
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What makes one real estate agent better than another?
When it comes to determining what makes one real estate agent better than another, there are several qualities to consider. According to Redfin, the top three qualities of a good real estate agent are experience, knowledge, and relationships. Experience in the current market is important, as the needs of buyers and sellers are constantly changing. In addition, a good agent will have knowledge of their local market and will know what sells in the area, how to highlight a home's best features to get top dollar, and seasonal trends in the market. According to Forbes, emotional intelligence is another critical characteristic of an exceptional real estate agent. A good agent should be able to understand their clients' needs, wants, and motivations, and be able to communicate effectively with them. The more experience they have, the better they are at negotiating prices. Since they're not emotionally tied in the sale, they negotiate objectively and based on the value of a home, which is a huge help when buying or selling properties. Furthermore, top real estate agents have certain personality traits that set them apart from the rest. According to Money Mini Blog, these include being proactive, having good communication skills, being adaptable, being tech-savvy, and having a strong work ethic. What is the difference between a good and great real estate agent? Problem Solver. Problems often occur during the real estate purchasing process. A good agent passes the problem to someone else to solve. A great agent takes action and solves the problem for their clients. In addition, the top real estate agents in the industry typically earn significantly more than the average agent and have a higher level of competency, honesty, integrity, and responsiveness. What makes a real estate agent stand out? Making a unique presence in your community with events, relevant virtual resources, and consistently great photography on your listings can make you really stand out as a real estate agent. Be sure to highlight unique features of your listings to curate experiences for your ideal buyers. Overall, a good real estate agent should have a combination of experience, knowledge, relationships, emotional intelligence, personality traits, and a strong work ethic to provide exceptional service to their clients. What are the best characteristics of a real estate agent? Top Ten Traits of a Real Estate Agent Problem solver mindset. Self-motivated entrepreneur. Honesty and integrity. Hustle and tenacity. Interest in houses and architecture. Engaging personality. Attention to detail. Understand the local housing market. Build a network of connections. Knowledge is power. What is the key to being successful in real estate? Be Available. Set Goals. Have a Marketing Plan in Place. Become an Expert in Your Market. Build Relationships. Ramp Up Your Social Media Efforts. Implement Small Business Systems. Don't Only Focus On Selling. Find a Mentor. Use the right tools and technology. The Tatum Praise Team is more than happy to help guide you through the process and advise you in the best direction possible. Contact Tatum at 813.528.1121 to start your house hunt today!
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Pros & Cons of Buying a Fixer Upper vs. Move-In-Ready Home
When buying a home, there are pros and cons to both buying a fixer upper versus a move-in ready home. It all depends on your preferences and expectations, as well as how much you are willing to put into the project. With the purchasing of a home, there are many factors to consider. While some dream of the day they can move into a new home, others prefer to take advantage of the opportunity that buying a fixer-upper may present. The real estate market is constantly changing due to location and demand. The main upsides of buying a fixer upper versus buying a moving ready home are, large savings and more flexibility in design. Most fixer upper homes are significantly less expensive than comparable move-in ready homes. Fixer upper homes allow you to create a home uniquely suited to meet your needs, budget and style. Maybe you have dreams of fixing up that cute little Bungalow, or maybe you’re ready to buy a home that’s outfitted with new appliances, right down to the paint. There are pros and cons to both buying a fixer upper versus move-in ready home. What’s more important: cost savings, low maintenance costs, or fast returns on your investment? Buying fixer upper can save you money, but it’s also a lot of work. You could end up spending a lot of money on repairs and renovations that aren’t always easy to find or handle, as well as ending up with a property that is still in poor condition. Though this might make buying it seem like a better deal initially, that could not be further from the truth. There is always a good reason to buy a move-in ready home. It’s not necessary, but the advantage is that you don’t have to put all of your time and effort into fixing something that’s already been done for you. Buying a move-in ready home allows you to skip the hassle and get right to the fun part of decorating. All you need to do is unpack your boxes, activate utilities, and start enjoying your new space! A move-in ready home is the best bet if you’re looking to purchase a home quickly. This means, structurally it’s all there, working appliances, functional plumbing and electricals. Everything about this home is ready for you to move-in with little or no work required. The main reason why buyers choose to buy move-in ready homes is that they won't have to deal with as many unexpected (or unknown) costs or projects after you get your keys. Also, you can more or less estimate your costs more precisely than with a fixer-upper, where you’ll have projects and contractors that can expound or change throughout the project timeline Buying a fixer-upper home can be a fun and rewarding experience, especially if you like being hands-on with your home repair projects. Additionally, fixer-uppers generally have lower prices than move-in ready homes, making them an affordable way to buy your first home. But while it can be cheaper to buy a fixer upper versus buying a move in ready home, there are also factors that may make it more expensive such as unexpected costs of renovations or repairs. If you’re interested in buying a fixer upper, we recommend hiring a property inspector who specializes in fixing up homes before deciding to buy one. So, what’s the best option? It comes down to preference, cost and your level of patience. If you have a bit more time and aren’t afraid of tackling DIY projects, you might want to consider buying a fixer-upper. But if you’d rather get settled into the home quickly, or are worried about putting in a lot of time and money into your new home (only for it to appreciate later), then straight-forward new construction might be the way to go. Whatever direction you decide to go, the Tatum Praise Team is more than happy to help guide you through the process and advise you in the best direction possible. Contact Tatum at 813.528.1121 to start your house hunt today!
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