Distinguished 4BR Colonial positioned perfectly on the water. Enjoy boating from your backyard, plus poolside water views and a spacious deck for relaxing. Large home welcomes all with a first floor master, gracious kitchen, Florida sunroom and more!
Listing Courtesy of RE/MAX REALTY GROUP REHOBOTH
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People approach the whole idea of owning a second home from a hundred different perspectives simply because a second home can answer so many different purposes. If you are an Rehoboth Beach homeowner at the stage in life where making retirement plans is becoming a more immediate imperative, you might want to buy a second home as a vacation destination—but one which is also a tryout for your family’s future center of operations. Those who have spent a good part of their lives in cities sometimes seek a second home in the mountains or at the shore as a restorative refuge. People living in less crowded environs might crave a pied-à-terrefor proximity to a city’s cultural riches. There really can be a hundred different reasons (and that’s not even counting all the financial ones)!
Once you begin to seriously entertain the notion, it becomes evident that deciding on which of many possible directions to pursue will involve weighing the tradeoffs each presents. In addition to an opening a conversation with the Rehoboth Beach real estate professional whose advice you’ve come to trust the most, some of the main points you will want to consider—
· If the second home is going to serve even temporarily as a weekend getaway spot, then buying within reasonable driving distance may be more important than you might assume. Keep in mind that the drive (or flight) will grow steadily less interesting as time passes.
· In most instances, a second home will be occupied by members of your family only on a part-time basis. This brings up a number of issues—among them, insurance. Vacant properties present a different profile to insurers than do homes that are occupied most of the time. Hazard insurance tariffs could also differ from what you are used to (especially in flood-prone areas). Investigating insurance coverage and costs early on in your search will help you to avoid surprises.
· You should consult your tax expert for details, but as a general rule, if the home is not rented out as a business proposition, you’ll likely find that you are able to deduct mortgage interest and property taxes on your Federal tax return. Then again, if you are thinking of renting the house out for more than 14 days per year, rental income is taxable. In that case, though, you’ll be able to use deductions for expenses, such as insurance, maintenance, professional fees, and sometimes even depreciation. Each situation will be different—again, your tax professional will have the relevant answers.
· Financing a second home is similar to financing your main residence. You are likely to need a down payment of 10% to as much as 30% in some cases. If you will be drawing on the equity in your current home, it’s only prudent to be able to retain a reasonable amount of reserves for unforeseen emergencies.
Many people buy a second home in anticipation of retirement. If that is the case, think of factoring in the availability of quality medical and support services in your search areas. A remote cabin in the woods may seem appealing now, but as a retirement venue, maybe not so much! Thinking about the long range is never more important than when you are entertaining the purchase of a second home. I’m here to help clarify those issues, as with all your other Rehoboth Beach real estate need.
On January 6, the Senate confirmed Janet Yellen to head the Federal Reserve’s Board of Governors, making it the first time ever that a woman has led the nation’s most important financial institution. In some respects, it makes her the most powerful woman in the United States.
As with every personnel change in the Fed, Yellen’s rise has fostered plenty of concerns about the direction the Federal Reserve will take under her leadership. Since it’s the institution that determines the federal funds rate—which in turn dictates how much businesses and individuals pay for their loans—any change in Federal Reserve policy has a significant impact on our local home loan rates. Sooner or later, those rates affect just about all of us.
So, what clues do we have about the direction Ms. Yellen is likely to lean? One came just before the financial crisis. Before the financial meltdown, Yellen expressed concerned. In 2005 she is quoted as saying, “Analyses do indicate that house prices are abnormally high, that there is a “bubble" element, even accounting for factors that would support high house prices."
Last year was an excellent one for Delaware real estate, yet according to the Standard & Poor’s Case-Shiller Index, national housing prices are still 20% off the peaks set in 2006. Research from real estate website Trulia shows that U.S. housing is still 4% undervalued (compared with a 39% overvaluation reached at the 2006 peak). Happily, Yellen, an early identifier of the previous housing bubble, has not expressed similar concerns about today’s real estate market.
In 2012, the Federal Reserve’s previous leadership announced an unemployment threshold of 6.5% as the point at which it would consider raising interest rates. During Yellen’s first testimony as Chairman, she stated that the Federal open market committee would likely keep interest rates near zero well past that mark. In Yellen’s view, the “recovery in the labor market is far from complete.” As evidence, Yellen pointed to 7.1 million people who are mired in part time work but who would prefer full time jobs—and to the 3.6 million people who have been unemployed longer than six months.
For Delaware home loan rate watchers concerned that a rise in rates might dent real estate values, the new Chairman has sounded some reassuring notes. In her recent address to the Committee on Financial Services, Yellen explicitly stated that she expects “a great deal of continuity in the FOMC’s approach to monetary policy.” That could mean that interest rates for local home loans might gradually rise, it’s not likely to be precipitous.
The bottom line: dramatic rises in interest rates are unlikely under Yellen’s watch, but those considering getting a home loan who have not yet taken advantage of still low interest rates might do well to consider doing so.
Savvy shoppers; don’t sit on the sidelines, call/text 302-228-7871 or email me, Russell Stucki, REALTOR ® of Beach Real Estate Market to provide detailed information on Delaware homes for sale, investment and commercial properties, luxury and waterfront homes, condos/townhomes, new construction, lots and land, farms and equestrian properties located in but not limited to Bethany, Bethel, Bridgeville, Dagsboro, Delmar, Ellendale, Fenwick Island, Frankford, Georgetown, Greenwood, Harbeson, Laurel, Lewes, Lincoln, Milford, Millsboro, Millville, Milton, Ocean View, Rehoboth Beach, Seaford, Selbyville, Delaware.