We are so living during a time when creativity can make the difference between just getting through it or getting through it with a bit of flair, and real estate purchasing is opting for the latter.
Back in mid-March just six weeks ago, I read about a couple of real estate financing startups. Since that time, the startups, as well as our lives and the lives of all real estate professionals, have changed drastically. Nevertheless, someday it will all be back, so I thought it was worth taking a look at.
Homebuyers who are unable to get traditional financing frequently lack the 20% down payment, don’t qualify based on income and assets or are being shut out of the market by cash buyers. As an alternative, one San Francisco startup created a system where buyers can put down only 10% and the company provides the rest of the purchase price in cash. A deed of trust is established, and the buyer is mandated to pay the taxes and insurance and gives the company a monthly payment used to build equity and ultimately buy out the house.
Another startup also based in San Francisco is using what was previously called “rent with an option to buy,” where an individual homeowner rents to a buyer and a portion of the rent goes towards the ultimate purchase of the home. The company buys the house, assesses a $10,000 nonrefundable fee and sets up a program of monthly payments designed to build equity even allowing for some credit if the home is not purchased.
This is a very short version of more complicated plans, and like any type of creative financing this can either fill a need for housing for individuals who don’t have the cash or qualifications, or it can be a dicey arrangement. However, it’s still nice to keep your options open.
Well now it’s time for the March sales numbers in Manatee County reported by the Realtor Association of Sarasota and Manatee comparing March of this year to March of last year:
Single-family properties are as follows: Median sale price $319,500, up 2.4%, average sale price $390,674, down 0.5%. New pending properties down 33.4%, new listings down 3.3%, pending inventory down 21.7%, active inventory down 14.1% and month’s supply of properties down 19% to 3.4 months.
Condos are as follows: Median sale price $215,000, up 5.7%, average sale price $251,136, up 4.2%. New pending properties down 32.5%, new listings down 5.2%, pending inventory down 26%, active inventory down 3.8% and month’s supply of properties down 8.3% to 4.4 months.
The numbers are much as has been predicted since basically all business is at a standstill. Closings are still in positive territory, but they reflect transactions that have been in the pipeline for a while. Unfortunately, we can expect more of this in the months ahead.
And as a reminder, Florida is the third most populated state in the country based on July 2019 records. We make up 6.47% of the population of the United States coming in at 21.5 million and are only surpassed by California and Texas. We have passed New York state in population by 2 million and currently have the same number of congressional representatives making Florida one of the major political players. This gives me encouragement for the future of our real estate market.
As always, stay safe and be creative in these stressful times.
