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Top Five Tips for Selling Your Home During a Pandemic

Sep 23, 2020 8:00:00 AM / by Don Magruder, CEO RoMac Building Supply posted in Real Estate, COVID-19

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Tammy Dunseath of RE/MAX Premier Realty is one of the top real estate agents in Lake and Sumter Counties. Despite the pandemic, she has been selling houses. In fact, she needs more homes to sell because demand is so high. It is counter intuitive to think that during the worst pandemic in 100 years and in uncertain economic times that houses would be selling. However, the real estate market in Lake and Sumter Counties has two unique advantages—they are in Florida and people fleeing from the big cities want to live in Florida.

Tammy Dunseath points out that unlike the housing boom of 2005-2006, people are not paying ridiculous prices for a home and the financial institutions are not lowering their standards for buyers. While prices are up, the home buyers she represents want value, and she notes that some home sellers are “overpricing their homes.”

Although it is a great time to sell a home, the experience of home buying has changed somewhat because of the pandemic. Tammy Dunseath shares her top five tips for selling a home during the pandemic, which will maximize your experience and price.

Dunseath’s first tip is, “Limit touch points when showing a home by turning on lights and opening closet doors, especially the master bedroom closet.” Home buyers who are concerned about COVID-19 will have a better experience if they can walk your home without touching anything. Make it an easy walk through.

Homes in Lake and Sumter Counties are being sold remotely and online to buyers across the country. Many buyers do not want to fly, and with modern technology and a good realtor there is really no need to make a trip to Lake County to purchase a home. Dunseath’s second tip is to hire a real estate agent with a broad online marketing program, which includes a 3-D tour, Facebook tour, video, and plenty of photos—including those from a drone on the outside. “By offering these marketing items to prospective buyers, the showings you do get will be fewer thus safer and more qualified,” says Dunseath.

For her third tip Dunseath says, “Insist on a fresh pre-approval letter from the buyer’s lender. With changing regulations, a buyer who qualified 30-days ago may not qualify today.” There are many cash buyers entering the market and buyers who finance their purchase must demonstrate their financial strength up front to enter a contract. A deal can fall apart quickly with a marginal buyer.

Dunseath’s fourth tip for selling a home during a pandemic is, “Do not wait.” There are home sellers who put off listing their home because they are waiting for the highest point in the market. No one knows or understands what the future holds and holding off on selling a home, banking on a higher return later is dangerous—just as the folks discovered in 2006. The right time to sell is when you are ready to move on with your life.

Tammy Dunseath’s final tip is, “Be a little flexible.” Do not forget that America is in the middle of a pandemic and everything is slower or delayed. Outbreaks of COVID-19 are slowing down lawyers, title offices, appraisers, and home inspectors. The home selling process can become frustrating. During these difficult times, expect delays and be flexible when it comes to scheduling a closing, executing contracts, and closing the deal.

The most important aspect of the real estate market in Lake and Sumter Counties is that it is active. Unlike other areas of the country, values have remained very good. If you are contemplating selling your home, now is a good time because inventory is low. Hopefully, these five tips will help you maximize your price.

Don Magruder is the CEO of RoMac Building Supply and host of Around the House, which can be seen at AroundtheHouse.TV.

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Housing Costs, Sales, and Starts Are Creating Uncertainty

Jul 22, 2020 12:00:00 PM / by Don Magruder, CEO RoMac Building Supply posted in homeownership, COVID-19

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The housing market has one of the farthest and deepest reaches into the American economy because it dictates where people live, how much wealth they can accumulate, and their ability to be mobile for work or changes in life. Additionally, because housing is onsite local construction, the impact on job creation is significant. Because so much is tied directly to the health of housing, everyone always asks me, “What is going on in construction and the housing market?”

The best word to describe the current housing market is “uncertain.”

First, it depends where you own your home. For instance, after the COVID-19 pandemic and civil unrest, the housing markets in the big cities are almost toxic. Indications are there is a seismic shift in housing paradigms as it relates to urban housing, and the millennials who just six months ago wanted their tiny apartment and condominium adjacent to their coffee shop and place of employment are scrambling to evacuate the big cities.

Home demand in the suburbs and country is picking up significantly, especially if reliable internet service is available. Large home offices in the metropolitan areas will give way to working from home, which can be done anywhere. In Central Florida, once the COVID-19 issue is resolved with either a vaccine or treatment, or both, expect a housing boom with much higher pricing. The only caveat would be if the country drops into an economic depression.

In summary, if you are an investor in commercial housing real estate in a large metropolitan area—I am sorry for your loss. On the contrary, if you have a home in the suburb or country that is near a major city— the price of business is picking up.

According to the United States Census Bureau, in May 2020 housing starts in America were down a whopping 23.2 percent to 974,000 starts versus one year prior. However, the median home price remained high at $317,900. This indicates that while starts are down, many people think this is temporary and that is the reason why median home prices have not cratered.

New home sales for May were up 12.7 percent from the prior year. Although that number is good, it potentially shows slower demand because pent-up business should have driven these numbers higher. The next few months this summer will determine where the housing market is rebounding as it relates to the prior year. The job market will need to vastly improve if housing is to grow beyond the current levels, and the data points are not encouraging.

Since April 2005, RoMac Building Supply has charted monthly the price of a 2,200 square foot home. Each month, the company releases a report to builders on the wholesale movement of pricing. This is the best snapshot in America on the true cost to build a home and allows builders to prepare future pricing. The RoMac Building Supply Whole House Commodity Index for June increased 3.1 percent from the prior month and is 8.0 percent higher from the prior year.

On paper, these numbers do not make sense. Housing starts dropped 23.2 percent versus the prior year, yet the price to build a home went up by 8.0 percent. The question is, “Why?”

The reason is simple—the COVID-19 pandemic has greatly reduced inventory production capacity as manufacturers and mills adjust outflow for the huge decline in business. A lot of companies have been hit with the coronavirus outbreak, which has significantly hampered production. Curtailments in production because of the coronavirus outbreak and economic shutdown in factories are creating spot shortages. While material prices will eventually moderate, do not expect significant drops until the coronavirus issue is resolved and after hurricane season.

Tossed into all these factors is the uncertainty of COVID-19. The recent spike in cases is creating fear and may delay or subdue the rebound in the housing market. Now is the time for home buyers and sellers to have patience and not panic, because the markets will stabilize.

One thing is for certain—nothing is for certain.

Don Magruder is the CEO of RoMac Building Supply and host of Around the House.

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National Housing Starts Plummet during Pandemic

Jun 10, 2020 12:00:00 PM / by Don Magruder, CEO RoMac Building Supply posted in COVID-19

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The Monthly New Residential Construction report for April released by the United States Census Bureau in mid-May was ugly, and the numbers reflect a country that is amid a pandemic and economic upheaval. The real challenge for the national housing market will be—when will buyers and sellers be prepared to start engaging the housing market and what will be the overall effect from the economic turndown? Unlike 2008, this economic turndown is not a housing and financial crisis driven event. Rather, it is a health crisis with economic consequences on travel, leisure, retail, and jobs. The overall impact of COVID-19 (Coronavirus Disease) will determine if this morphs into a housing crisis.

In April, new home starts dropped 30.2 percent from the prior month to 891,000 units, which is 29.7 percent below the prior year. In terms of April in the current historical cycle, housing starts have gone back to 2014-2015 levels in one month. Within these housing starts are single-family homes and multi-family homes, which generally represent apartments and condominiums. Single-family homes were down 25.4 percent and multi-family starts fell 40.3 percent from the prior month. It is probably too early to predict, but this could suggest that the interest in building apartments and condominiums is waning, which could push rental costs higher.

Within this report, the government reported new home building permits dropped 20.8 percent from March, but new home completions only dropped 8.1 percent. This suggests that builders continued to work despite the stay-at-home orders issued by many states, but it may come at a price later as backlogs in work could be thinning. It is apparent builders want to work.

The real test for the national housing market is the recovery over a 6 to 12 month trend instead of the first couple of months after the states reopen. Although there will be a bounce in homebuilding, it may not be as strong as other sectors may experience because construction sites did not completely close. For example, most construction sites in Florida remained open and did not miss a day of work on the jobsite. Plus, there is the time factor—it takes longer to build and sell homes than it did 30 years ago.

Expect the housing market to bounce up from its April’s lows, but the weight of high unemployment coupled with a general economic slowdown could push buyers away, creating a slower overall national market. Because this economic turndown is not a housing or financial crisis, the national housing market could bust up into the have and have-nots.

There is little doubt, the huge urban cities will see huge exoduses as companies allow more employees to work for home. Less populated areas that are warm and sunny will be very appealing to potential buyers who faced months of quarantines and lockdowns in a 700 square-foot apartment. Many larger metropolitan areas will probably have housing depressions with plummeting home values while rural or small cities located in warmer climates could see a housing boom.

The problem for middle-class and low-income workers is that people moving to their area will dramatically increase housing costs and exacerbate the problem of workforce housing. This will be especially true in the state of Florida. Before this happens, state and local governments must enact meaningful policies to protect and encourage workforce housing or the state could turn into a land of only the rich.

National housing numbers will be interesting to gauge the total United States housing market. Chances are there will be huge disparities between markets as people seek safety from future pandemics.

Don Magruder is the CEO of RoMac Building Supply, and he is also the host of the “Around the House” Television Show which is hosted weekly on Lake Sumter Television. For more information, go to www.Aroundthehouse.TV.

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Expect Delays in Building Products Because of COVID-19

May 20, 2020 2:00:00 PM / by Don Magruder, CEO RoMac Building Supply posted in Economy, COVID-19, coronavirus

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Most would think as the economy slows the availability of building materials and products for the home would be more plentiful and lower priced. However, there is a good chance the opposite may be true over the next few months. Building products are heavily driven by commodities like lumber, oil, and steel. When those raw materials face supply disruptions, that can trickle down the supply chain. COVID-19 (coronavirus disease) is slowing the production and delivery of raw materials in certain building material sectors as the requirement of social distancing is limiting manpower. Plus, there are some companies that have closed due to the disruptions.

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It’s Time to Encourage Going off the Grid

Apr 29, 2020 1:30:00 PM / by Don Magruder, CEO RoMac Building Supply posted in COVID-19, coronavirus, off grid

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Coronavirus Disease 2019 (COVID-19) has demonstrated to most Americans that you cannot completely rely on the government to supply all your needs in times of turmoil and emergencies—you may be on your own. This was also evident in the government’s responses to the major hurricanes in New Orleans and Puerto Rico as well as the large wildfires in California. Since the 1960s, many Americans have been programmed to believe that in times of need and emergency, the government will always be there to rescue them. These events show that this is simply not true.

If you believe that reliance on government is limited, especially in times of great need and emergency, a discussion must be had from local government to the halls of Washington, D.C. about encouraging homeowners and businesses to get off the grid and become more self-reliant.

Because of technology, at no point in mankind is getting off the grid and living comfortably become so available to everyone. The challenge is that most laws and codes in all areas of government discourage getting off the grid. They are used to promoting conformity in society, which leads to great reliance on government and its services. Just maybe, the master designers of communities should rethink how the homes of tomorrow are to exist within the various networks.

The deficiency that is evident in all these national emergencies is the reliance on single infrastructures. For example, one water system, a single computer network, or power grid could literally control the survival of millions of people if knocked out by a terrorist or deadly virus. Conformity in codes and jurisdiction restrictions are making communities more vulnerable.

What can be done to avoid this type of mass conformity in codes and regulations, which could lead to mass disruption?

First, encourage solar energy everywhere—even in cities. The notion of one power plant and a few strands of wire servicing millions of people is archaic. If you don’t want to cripple your community or nation during a national emergency, let the builders and great electrical engineers of the country start powering homes and businesses off the grid with solar and wind. Propane generators are becoming popular with intervals of power outages and this technology has advanced to make switchovers seamless from traditional and nontraditional power sources.

Massive water and sewage facilities are less expensive because of scale. However, if one goes out, millions of people are left without water and basic sanitation. The states, especially Florida, that have an abundance of water should encourage well and septic systems with enhanced technology that protect the environment. Desalination plants along the coastal lines of Florida could provide an alternative to water as this technology advances. Finally, for those who have a water well that operates off an electric pump, you should consider investing in a hand pump system, which can be used during a power outage.

The days of running cable lines are quickly coming to an end with satellite and fifth generation (5G) cell phone technology. Although these are great when power is available, there can be gaps. The country should not completely abandon radio frequency technology and homeowners should be mindful that an old-fashioned battery radio is a great alternative during a crisis.

Finally, landscaping ordinances must be modified to allow home vegetable gardens and small animal production. Codes should be modified where homeowners can freely plant vegetable gardens and raise small animals, such as chickens, to provide their family with a source of food. As seen during the coronavirus outbreak, many items such as eggs and vegetables are in short supply. Homeowners wanting to provide for their family should be allowed to, regardless of building codes and deed restrictions by homeowners associations.

A home is not a showplace; rather, it is a place to provide shelter and raise a family. It should be a place where a family can be self-reliant with the land they own. Only in America are homes restricted where their true value cannot be utilized—this needs to change. Too many people on one system puts everyone in peril.

Don Magruder is the CEO of RoMac Building Supply, and he is also the host of the “Around the House” Television Show which is hosted weekly on Lake Sumter Television.

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