oviedo real estate | Your Waypointe Real Estate Group

The Current Real Estate Market

Selling in this market is a little unusual. A lot of sellers are still hoping, or are in the mentality of where we were last year, where they list their home and it’s going to fly off with multiple offers and getting top dollar for their home. That’s not quite where we are anymore. In fact, a shift started happening around end of May- June of 2022, where we started seeing things drastically slow down. Obviously, the Feds raising the interest rates had a huge, huge effect on the way that buyers were pursuing homes.

We saw buyers take a sideline, but sellers still need to realize that the pool of buyers is a lot smaller than it was before. They are a little more weary, and don’t want to spend as much. So they’re seeing that if they wait, maybe these prices are going to go down.

Well, as a result of so many doing that, we have seen prices drop a little bit and we’ve seen days on the market increase.

It’s still a seller’s market, but it’s a little ironic because it’s kind of a buyers market as well. I’ll explain why. Typically a seller’s market, in order to stay a seller’s market, inventory months of supply has to be between 1-3 months. We are there. We are still at about a two months supply.

Now, once it hits between 5-7 months, that’s where it’s a neutral market. And then after seven months and beyond, it becomes a buyer’s market, where homes are staying on the market a lot longer. And we’re talking months. We’re seeing right now 30 to 45 days in some areas as the average days on the market.

The last couple years, what we experienced was an unusual market. I don’t even know if we can call that a seller’s market. That was pandemonium. That was absolute madness with homes flying off the market above asking within hours of going live. What we can say is that it is a seller’s market.

Inventory numbers are very low, so there are not a lot of options for buyers. There are opportunities, but not a lot of options. So if buyers really want to buy, they can. There’s enough inventory for them to make a decision and not a lot of competition necessarily the way it was last year. But it still gives sellers a little bit of leverage because inventory numbers are low.

Now, they can price it whatever they want, but that’s not what buyers are paying. The houses that are flying off, even in today’s market, are the ones priced a little bit below market value and that is why they get multiple offers.

Market value is a tricky phrase. You hear that thrown out all the time. What is market value?

Market value is what a buyer is willing to pay for a house. The end.

It’s not what a seller thinks their home is worth. It’s not what an agent thinks they should list the house for. It’s not even what an appraiser thinks the home is worth.

It is what a buyer is willing to pay. Which is why last year our market value/ property values all skyrocketed. Why? Because the seller wanted a number. The agent listed a number and then buyers said no, we’re willing to pay even more than that. And another buyer would say I’m going to pay more than that. That’s how that continued increasing prices and why it became a little bit like the wild, wild west of offers. That is not normal.

Never seen that before and I don’t think we’re going to see that again.

But what we do see is that people are constantly moving into Florida. Florida is not experiencing a lot of the same shifts that other markets are because we still have a lot of people coming in and wanting to live here. We also have an affordability problem and we have a housing crisis. We do not have sufficient homes for everybody that’s moving in.

We have so many people moving in on a daily rate in Florida that we cannot actually handle. So we are seeing that we have housing crisis. Rents are so high in our area in fact, some people are shocked when they hear that it’s comparable almost to Miami and to other metropolitan markets. But this area has become a place where people want to move and raise families and grow and have their careers.

Even if they can work remotely, they’d rather be in Florida, right?

Those drastic shifts that people thought were going to happen still haven’t really happened here in Florida because we have an amazing state that people want to live in. We have great weather, which a lot of people love. We do see a lot of northerners coming back or coming here because especially during this time, because they’re sick of the cold; they’re sick of winter.

So those are the considerations that people are looking at when they’re making a move. So with all of that, sellers have to be realistic about what they price their home if they want to sell.

Yes, there’s low inventory, yes, there are buyers, but the pool of buyers is much smaller than it was before.

We have seen that sellers either are not realistic or they’re just not in a rush. They have equity in their homes and even if the market goes down, they still have equity because all home values went up significantly over the last few years

So people have equity. Even if the market drops a little bit, it hasn’t dropped to where we were pre-pandemic numbers. As a result, sellers are realizing they don’t have to move, so they’re going to sit right here on overpriced homes. And there are others that do have more of an urgency and motivation to sell and that’s where you’re going to find opportunity.

Is there opportunity? 100%.

You have to work with professional advisors like myself and my team that can help guide you through the process, help connect you with mortgage professionals and lenders that can help you get that 2-1 buy down that can help you get the best interest rates out there on the market right now and help facilitate a plan if it’s in the next month, or three to six months. We can help facilitate your homeownership goals and selling your home. So give us a call if you have any questions.

Here's why you should think twice before getting solar panels

The idea that we can gain power through solar is fantastic. We promote solar power and think it is something we should look forward to what future technologies can offer, but the current infrastructure is not conducive for long term solar growth and is creating greater waste, especially when it comes to home solar systems. Let’s dig deeper.

This article is intended to educate an otherwise uneducated population that assumes the best of solar panels and the very insistent and persuasive sales people pushing this product.

We’re going to look at this from a real estate, roofing, insurance, title, appraiser and lending professional perspective as well as discuss some very serious issues that consumers may be unaware of.

Real Estate Perspective

As a real estate professional in the industry for almost two decades, I saw the transition of solar panel systems becoming an affordable option for homeowners and a very slow adoption to residential sales.

From 2012 – 2015, we saw the cost of residential solar systems becoming cost-effective for the average American household. In 2015, more residential solar power was installed in the U.S. in over 18 months than in all the cumulative history prior to this.

Since that time, we have seen a tremendous growth of solar panel installments and an even greater number of sales people door knocking trying to convince homeowners that it’s a good idea.

Let’s look at what this means for a homeowner when it’s time to sell.

First of all, there are several things to consider if you’re thinking about installing solar. How long are you going to live in your home? The break-even point may not even be worth the hassle, insurance and other costs involved when you look at the big picture and not the monthly fee people get caught up with.
For example, how does saving $50-100 per month on your electric bill make up for spending more than double that on a monthly solar payment? Financially, the numbers don’t make sense.
If you plan on being in the home over a decade, I don’t recommend it because it takes an average of 9-12 years just to break even. But please consider this from a solar panel installation company. If solar can save you an average of $26K on electricity costs over 20 years but the system costs you over $30K and most people don’t live in a home past 8 years, can you explain how this makes financial sense?
Those contracts are NOT written favorably for the homeowner. We’ve seen sellers stuck in their contract where they’ve either had to pay off the solar panels ($30K-70K – depending on the square footage) before selling or splitting with the buyers. Either way, this is a tremendous percentage of their equity out the window on a system that most people don’t pay off and see the break even point.
Solar panels become liens on your property that MUST be transferred to another buyer and may disqualify a buyer that could have afforded your home because of the additional debt of the panels. When solar panels are present, lenders now have to make sure the debt to income ratio isn’t too high or financing will not be approved.
“If you’re not buying your solar panels with cash, the manufacturer may place a lien or Uniform Commercial Code filing on your property to make sure you keep paying for them. Unfortunately, when you go to refinance or sell the property, it’s generally trouble to have any kind of lien on your home.” (Source: Rocket Mortgage)
Appraisers are NOT adding the value of solar panels into an appraisal to compensate for the debt incurred, yet you are still paying taxes on the newly assessed value of your home after permits have been closed.
If solar panels are leased, the leasing company has to approve the transfer and do a credit check. Selling a home can be complex enough without having to add this headache of yet another approval.
Resale value with solar panels is not as exciting as homeowners may hope. As of now, the majority of home buyers appreciate that a home may have them (unless they understand the insurance nightmares we’ll discuss later), but they won’t add value to it when considering making an offer on a home.

Did You Know?

The absolute best solar panels are only up to 33% efficient with the best inverter and completely brand new. Check out this article on the “best solar panel systems” and none go above 24.69% – please let that sink in for a second. (Source: Solar Reviews)

Just why?

New homes are built energy efficient already and do not need solar panels, but unfortunately some developments have required solar panels to be obtained by the homeowner so there is no choice in the matter except a heavy added price tag, especially if damage to the roof incurs and a replacement needs to happen (more on that soon).

Here’s a sad story shared by a Realtor and like this one, there are hundreds more:

There are so many other improvements to a home that can make a HUGE impact in your value, but this one has more expenses and risks that may not be worth it.

Roofing Perspective

Let’s start with the fact that roofing companies love solar panels because it means a new roof. However, when you ask a roofing professional their honest opinion, it paints a different story for consumers. Let’s begin with two simple questions:

Why are solar systems harmful for a roof? “Holes in the roof can lead to leaks forming over time. With the presence of unexpected moisture, the possibility of water damage and mold growth becomes very real. On that note, damage to shingles and roof tiles from drilling or hammering during solar panel installation is almost guaranteed.” (Source: Solar Stack)
What does it take to install panels? “Roof-mounted panels require workers to drill holes in your roof to install the platforms where the solar panels rest. The sizes of the holes depend on your roof’s foundation and material. These holes hold the fasteners which attach the solar panels to your roof. Like how roof construction normally works, solar panel installation requires workers to use flashing. Flashing is plastic or metal sheets that fit underneath the tiles or shingles of your roof. Workers then seal the flashing and the area around the fasteners to prevent the holes from allowing water to leak into your home.” (Source: Solar Alliance)

Because of the way the panels need to be installed, insurance companies have stopped the coverage of these panels and require a special coverage provided by the solar panel companies or an add-on from the insurance carrier.

Here are some concerns directly from a roofing professional:

1. Solar panel companies are not staying in business long enough to outlast their manufacturer’s warranty. This should be highly concerning for homeowners thinking about getting systems installed.

2. Solar cells dying after 15 years long with the converter not being able to convert the energy captured

3. Solar panel representatives sell you on the idea that energy prices will increase (which most likely they will), but they also don’t tell you that you won’t make your money back in the first 10 to 15 years. They initially sell you the idea that you’ll make your money back between the first 5 and 10 years but that doesn’t actually happen.

4. The tax credits aren’t enough to justify the savings you’re being sold.

5. If your roof is too old they can’t install the solar panels, so you end up having to pay for a new roof as well. Most companies will put the roof into the loan of the solar panels, thus incurring additional debt.

6. When you put solar panels on the roof, wherever there’s a solar panel it voids the roofing warranty of the shingles on that slope.

7. After solar panels die, they end up going to the landfill and they become hazardous waste due to the materials they are manufactured out of. So there are pictures of “solar panel graveyards”all across the United States.

Ironic how something that is supposed to be environmentally sound, is actually creating toxic waste.

Insurance Perspective:

Insurance is not anti-clean energy, it’s just not good business to provide coverage. Why? Claims costs are the drivers behind the issues of insurance companies not wanting to adopt solar PV arrays.

It’s often not just as simple as taking them off and putting them back on when the roof needs replacements. The costs of replacing the roof with solar is tens of thousands for insurance companies:

Roof replacement from where solar was
Solar panels themselves
Storage fees (typically about 3 months and averages $5k just to STORE the panels)
Moving fees to the storage facilities while roof is getting replaced
Misc. fees

Insurance companies caught on rather quickly that this was an immediate liability for them to cover the roof where the solar panels are on. If they do, there is a premium.

Insurance is available but coverage limitations may vary from company to company. Importantly, don’t assume ALL insurance companies will take a home with solar.

Here Are Some Things You Need to Know:

“If you have roof-mounted solar panels, the coverage on your homeowners policy may pay to repair or replace them if they’re damaged by a covered peril. Some insurers may not cover wind or hail damage to roof-mounted solar panels.” (Source: Progressive)

If the roof needs to be replaced, how does that affect the panels?

“If you run into a roofing issue, and need to replace the roof post-installation, there will be labor costs associated with taking the panels off your roof and putting them back on. Unfortunately, it’s hard to give specifics on the costs associated with this labor, as it can vary greatly. Installers will have different rates for their labor, and the cost can also vary based on the size of the system, how many panels will need to be removed, and whether you need a place to store the equipment. If mounting hardware also needs to be removed in order to replace your roof, this will add onto the cost. On average, residential installations tend to cost somewhere between $1,500 to $6,000 to remove and reinstall. (This is not inclusive of the cost required to replace your actual roof.)” (Source: Energy Usage)

People always want to know if solar panels will be covered in their policy. Because each insurance company is different, they have a variety of reasons they may or may not cover solar panels. Essentially, the cost of having solar panels is a huge risk and cost for insurance companies.

Let’s take a look at how particular insurance companies can be with solar.

Frontline Insurance

Frontline, for example, will accept solar panels (as long as they are not net metered). Those familiar with the inner workings of solar panels know that ALMOST ALL systems are net metered, meaning owners can sell back energy to the power company (not that they get much from this).

Florida Family Insurance

Florida Family will accept up to 20 solar panels on homes over 2000 sqft as long as it is no more than 50% of the roof area. Under 2000 sqft, it is limited to 10 panels.

Florida Peninsula Insurance

Florida Peninsula accepts solar systems up to Tier 1. What is a Tier 1 system? Up to 10kW, which is often the “magic number” in these systems.

American Traditions Insurance

American Traditions accepts solar panels and you can BUY BACK coverage for hurricane protection, which in Central Florida can cost typically between $450 for a $20,000 solar system.

AAA Insurance

AAA Auto Club is remov

Reality of Selling in Today’s Market | What seller’s need to know

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