It doesn’t take long for a get together with friends and neighbors to morph into a conversation about real estate. One of the preferred topics among the dozens of available real estate topics is second homes, so here’s something that you can float during your next real estate conversation.
Government-backed mortgages obtained through Fannie Mae and Freddie Mac frequently set higher standards for second home buyers. Second home mortgages are different from investment mortgages, which allow renting and always come with higher mortgage rates. But what if you want to rent out your second home but not classify it as an investment property?
Second Home Riders, which have been in force since 2001, are generally attached to the financing of a second home. The rider has always been interpreted by lenders as prohibiting second home owners with Fannie Mae and Freddie Mac backed mortgages from renting the property. This has recently been clarified making the rental of a second home more broadly accepted by lenders. The new wording for the rider allows homeowners to rent a second home after one year of ownership and it allows short-term renting in the first year.
The language was amended at the request of lenders looking for a clarification related to Airbnb rentals and other short-term rental services. Of course, short-term rentals still must meet state and local vacation rental laws. As we know, currently in the Florida legislature there are two vacation rental bills, which as of this writing are going nowhere. If the state Senate and House can agree prior to the end of the legislative session and the bill passes, it would preempt the regulation of short-term vacation rentals to the state and take the rental authority away from local municipalities.
For now, let’s take a look at all sold properties for the month of March reported by the Realtor Association of Sarasota and Manatee:
Single-family homes closed 8.4 percent more this March compared to last year. The median sale price (half above and half below) was $312,000, 9.5 percent higher than last March. You may recall that February’s median sale price took a dip below the $300,000 mark and was $298,500. The average sale price was $392,616, a 6.9 percent increase. The median days to sell were 58 days, an increase of 23.4 percent, and the month’s supply of available properties was 4.2 months, down 8.7 percent.
Condos closed 2.8 percent less this March compared to last March. The median sale price was $203,450, up 1 percent. February’s median sale price was $189,000. The average sale price was $240,995, down 1.9 percent, median days to sell were 74 days minus 14.9 percent, and the month’s supply of properties was 4.8 months, down 5.9 percent.
Overall, we had a great month. Not only are sale prices up, but properties are selling faster. The flip side is the number of available properties, which is down for both single family and condos. It’s never good to have low inventory. I can’t wait to see the April numbers.
It’s quite a different story on a national level. According to the National Association of Realtors, March existing home sales declined by 4.9 percent from February and 5.4 percent from last March. Nationally, the month’s supply of properties is down to 3.9 months.
Next week we’ll have a little more about Anna Maria’s favorite cocktail party conversation. In the meantime, enjoy your first home and your second home if you’re lucky enough to have one and be happy you live in Manatee County, Florida.
More Castles in the Sand:
