Listing Courtesy of RE/MAX REALTY GROUP REHOBOTH
Suppose you are a Rehoboth Beach homeowner who intends to move to a different home eventually, but for the moment, you aren’t under any particular deadline pressure that would dictate when you have to put your home on the market. In that case, you’re likely to keep tabs on overall market conditions, awaiting what looks like circumstances favor those with homes for sale.
Twice a year, the National Association of Realtors® issues their economists’ midyear forecast—it appeared last week. For those with homes for sale in Rehoboth Beach (or anyone thinking about adding theirs to the homes already for sale), the outlook was heartening.
The forecast was for the greater U.S. economy to improve, bouncing back from the weather-blasted winter stall which made the first quarter a disappointment. Subsequently, consumer spending opened up, causing expectation that the GDP would rise in the remainder of the year. Overall, the forecast for 2015 was positive, though lukewarm. As a whole, the year promises to be “not bad but not great.”
On the other hand, focusing narrowly on the outlook for U.S. housing market activity—homes for sale—the upside momentum was already decidedly more in evidence. The prospects for any single one of the Rehoboth Beach homes for sale depend upon a combination of factors, but if national activity is any reflection, the latest numbers packed what you could call a “6-7-8-9 punch”:
· Existing home sales in May notched a high water mark not seen in 6 years (and the 2009 level had been artificially inflated because of an $8,000 homebuyer tax credit).
· New home sales hit the highest level in 7 years.
· Housing permits to build new homes registered an 8 year high.
· Pending contracts to buy existing homes for sale reached a 9 year high.
Examining the demographics behind the figures, it was clear that, for the first time in quite a while, first-time buyers are back. Last year during the same period, only 27% of buyers were first-timers. They now make up a more normal 32%. As prices brought by homes for sale continued to rebound, institutional investors were disappearing from the scene, creating a more typical mix of buyers.
A major part of the reason why homes for sale were fetching “stronger than normal home price growth” had to do with a shortage of inventory—ascribed to the volume of new homes being built (or not being built). The rule of thumb is generally for about 1.5 million new homes to be constructed per year, a mark that’s failed to be realized for a number of years. In 2009, only 550,000 home were built—and the total had barely reached a million through last year. But now, with optimism among homebuilders at newly robust levels, it’s expected that normal output will have fully resumed by 2017.
The other major factor boosting sale prices was the specter of mortgage rate increases. Rising mortgage rates “initially rush buyers to decide”—just the kind of sign that could tip the scales for a homeowner who’s been waiting to add their property to the homes for sale in Rehoboth Beach. Should you decide that this summer is shaping up to have just the conditions you’ve been waiting for, I hope you’ll give me a call for a no-obligation consultation! Call/Text me Russell Stucki at (302) 228-7871, email me at email@example.com, visit more listings at www.beachrealestatemarket.com.
In conjunction with the rise in house prices, the profit potential for flipping a home in Sussex County is once more drawing the entrepreneur-minded.
Flipping a home is the process of purchasing a property—often one in a rundown condition—then improving its value and reselling it for a quick profit. Quick is the key word in this strategy, since a fast turnover allows capital to be devoted to purchase and renovation rather than operating and maintenance costs. It’s why successful house flippers generally focus on quick gains over maximizing profits.
While this has proven to be a lucrative strategy in the past, financing has always been the first major hurdle for anyone flipping a home in Sussex County. If you’ve been noticing some of the inviting house-flipping prospects in Sussex County, several financing routes sometimes make such a deal possible:
Larger Down Payment
Flipping a house in Sussex County in the current lending market will often require a significant down payment. Since launching the project might require at least 25 - 40% for financing, it’s essential that you prepare sufficient cash reserves to complete the renovations envisioned—and successful house flippers suggest you add 20% to the cost estimate!
Seller financing—a mortgage provided by the home owner—is also called a ‘purchase money’ mortgage. Sellers may be willing to provide financing if they have had trouble selling their property, which is often the case when a Sussex County home flipper believes its value, can be greatly enhanced by repair or remodeling. Seller financing would be more common were it not necessary that the original owner own the home outright.
Hard Money Loan
Hard money loans—also known as short-term bridge loans—are another common source of financing for flipping a home in Sussex County. Hard money loans are backed by the value of the property rather than the credit record of the borrower, and typically feature a lower loan-to-value ratio than found in a bank mortgage. The added risk has a cost: expect to provide a large deposit and a premium for the loan (often 8% or more).
While sub-prime mortgages may no longer be as readily available as they once were, there are still multiple sources of financing for entrepreneurs who can spot profit possibilities for flipping a home in Sussex County. With real estate prices continuing to rise, this spring again holds promise in the house-flipping arena. 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.