Monday, February 20, 2006

Modular Home Invasion

By Peter C. Fyler - Exclusive Buyer's Agent

I read an article in the Real Estate Section of the New York Times back in January 1999 that peaked my interest in Modular Homes. It reported on the new wave of modular homes filtering in to some of the most affluent upscale communities in the Northeast. The article described an 8900sf 23-box modular home construction in Greenwich, Connecticut of all places. Another large modular home was being put together in Armonk, New York. Up to this point my understanding of modular homes was limited to what was called a “double-wide”, those ugly little ranch houses that look like trailer conversions or two trailers tied together up on blocks. I was soon to learn this was no longer true. I went to visit one of the companies named in the article, Westchester Modular Homes in Patterson, New York. I inspected their model homes and spoke with a friendly factory representative. Westchester Modular Homes has their factory in Wingdale, New York, so I went over there and took a tour. The factory is like a huge football stadium and everything is done indoors in a controlled environment. It was amazing. Some of the other manufacturers interviewed for that New York Times article were Excel Homes in Liverpool, Pennsylvania, Homeworks Modular Homes in Ronkonkoma, New York, New Era Building Systems in Strattanville, Pennsylvania and New England Homes in Greenland, New Hampshire. I learned that when considering a modular home, it is the dozens of available upgrades that will drive up the price. The final finish work after the boxes are installed on your site is what defines the visual quality of the final product and we have many excellent finish carpenters on Martha’s Vineyard who are real craftsmen.

Ever since my experience at Westchester Homes in 1999, I have been a great believer in modular home construction. My appreciation is partly due to seeing the level of quality, or lack of quality, produced during the 80’s when anyone who could hold a hammer came to Martha’s Vineyard to cash in on the boom. Unless you are fortunate enough to engage one of the top builders, many of whom are committed to projects 6 to 24 months in advance, you may be at the mercy of poorly managed construction crews that create inferior products with numerous inconsistencies. It has been my observation that quite often workers spend more time running back and forth for nails and coffee than time on the job, or they disappear for no apparent reason not to return for many days. Excavators, framers, masons, electricians and plumbers work in weather that even the seagulls would seek shelter from, but in many cases it is not their fault. Stick-built construction takes a lot more time and most clients want everything yesterday. If you are going to have your home stick-built, you have got to be patient.

Today we see more and more modular homes being constructed on Martha’s Vineyard as the harbor and roads are choked by these monsters being maneuvered to their final resting place.

I do not agree with some of the statements made in the following article published in the February 19, 2006 Real Estate Section of the Boston Globe, because I have been told by manufacturers that prices for stick-built and modular are about the same if you compare them apples-for-apples. I do not agree that the construction price on the Island starts at around $200 per square foot. We have not seen that number in a few years; it is more like $350 per square foot today and ranges up to $550 per square foot at the high end. However, the article is interesting, so I offer it for your edification.

Click here to read article -> Modular Home Invasion on Martha's Vineyard

Saturday, February 18, 2006

Is owning a Condo on Martha’s Vineyard the right lifestyle for me?

I have never been a fan of condos on Martha’s Vineyard. People think condo living is easier than maintaining a home. That may be true in America, but I believe maintaining a home on Martha’s Vineyard is not as difficult as you might think. Nevertheless, for those who really want a condo, here are some suggestions that could prevent painful mistakes when purchasing a condo.

If by chance you have a choice of units, which rarely happens here, compare unit locations. Consider not only the compass location as it relates to the seasons, but also noise producing factors like proximity to the community pool, tennis courts or playground, club house, or main roads and bike paths. Where available, second floor units are usually quieter, but not as convenient for senior citizens.

The price of owning a condo does not end with the mortgage. I cannot stress this enough: There can be numerous fees. Some of those fees are basic, while others are hidden and undisclosed or pending but not due until after the closing. You need to attach a dollar value to all those amenities and conveniences and evaluate exactly what you are receiving for the fees you are paying. Is it all worth the price? In most cases, fees that are due prior to closing are the responsibility of the seller but disclosed fees due after the closing are the responsibility of the buyer, so make sure you have a clear picture of all finances that could effect you. Is there a HOA emergency fund account and how much is in it? Are there any major maintenance projects being considered for additional assessments? These are all questions you should be asking.

Get copies of all documents current to the date of closing. You want to review the minutes from the Home Owners’ Association (HOA) meetings and the Condominium Documents and Declarations. These documents as well as additional information like the public offering statement which outlines the Conditions, Covenants and Restrictions are available from the Registry of Deeds, the condominium management company or the law firm representing the property owner. When reviewing the documents, pay close attention to voting rules as well as current and proposed changes in the budget. Be sure you know how the responsibility for common areas is handled. You want to know how many parking spaces are attached to your condo ownership and where they are. You want to know the rules and location of additional parking when you have visitors. You want to know what your storage area looks like and where it is located. Be sure you are clear on any restrictions that could limit your use of spaces outside your unit, as well as limitations and restrictions regarding rentals, both in terms of income and time period. There are also sure to be restrictions regarding ownership of pets. One of the best ways to know what life is going to be like in your new condo is to talk to people who already own condos so don’t be shy, knock on doors and approach people.

Martha’s Vineyard is first and foremost a vacation area and one of the main businesses here is taking care of the homes of seasonal residents. Most properties require minimal maintenance and caretakers charge very reasonable rates. The choice is yours, but for my money I want to own the dirt.

Friday, February 03, 2006

When real estate agents get together, what do they talk about --- Real Estate!

By Peter C. Fyler - Exclusive Buyer's Agent

I was chatting with some of my colleagues the other day regarding their perception of today’s market. There is an old saying in real estate; your first offer is usually your best offer. That advice should be given to sellers when they ponder the question, "If I hold out, will I receive a better offer?".

I think this is an opportune time for buyers because sellers are not sure how solid this market is. One of the seller’s agents I was speaking with said he believes sellers are becoming surprisingly willing to engage and negotiate offers far below their asking price. They are anxious, impatient and driving the seller agents crazy with their #1 question, “Why am I not getting any offers on my property?” This all confirms my belief that this is a good time to get into the market, although I can tell you the market is very solid on Martha’s Vineyard despite the fact it has slowed down.

I believe for the next few years we will experience single digit appreciation opposed to the double digit gains we have realized for the last few years. These numbers are nothing like what we saw in the mid 80’s but speculators are still over extended. In the late 80’s, speculators got arrogant and kept on investing in more and more properties and/or building more and more houses. When the bubble burst they were left holding a big bag. Once again I think they are “feeling” stuck and they are panicking. However, this time the stakes are much higher as property values have at least doubled to perhaps tripled in some areas and the houses are equally large.

Panic is good; it translates to my belief that if you want to get into this market and make a long-term investment, now is the time to do it. However, I want to be perfectly clear; you have to approach the market with finesse if you want to succeed. This means “low ball” is not the operative game plan, but bold realistic offers are what could make you a winner. In my opinion the smart strategy is to approach the process with the mindset, 1) you cannot be emotionally attached because you may be buying a stepping stone which means it might not be the perfect scenario or your permanent vacation home, and 2) you have to be willing to walk away and move on to the next property if the seller does not accept your offer. As my mother and some old guy used to say, “Faint heart never won fair maid”. Another clich├ęd phrase is “nothing ventured nothing gained”. You can always revisit your offer another day, shall we say, after the porridge has cooled down.

I will close by relating my own experience when I wanted to buy a home in Florida. My wife and I looked and looked, and every time we went to Florida the prices were higher. Finally, I said we had to do something or we would never get into that market. We bought a property that has gone up practically 100% in two years. I realize our gain is only on paper right now but the market is still strong in the area and when we are ready to move to the property we really want, we will have this property as our foothold and margin builder. I don’t know if that makes sense to you but I think we did the right thing.

Wednesday, February 01, 2006

Come to the Vineyard and enjoy an Uplifting Experience!

By Peter C. Fyler - Exclusive Buyer's Agent

It's a new year up-lifting real estate theme: take a
look at how easy it is to lift up a house on Martha’s
Vineyard. You may find the perfect house in the perfect
location with the only negative being the foundation
--- a crawl space or a severely compromised block or
stone foundation. It is considered routine and common
place here to lift up a house and put an entirely new
poured concrete full foundation underneath the structure.
The costs can range from $30K up to $50K or more depending
upon the size of the house. So, do not be scared away
from your dream location just because a perfectly good
structure or Vineyard classic home has an inadequate
and outdated foundation.

Baby Boomers and estate taxes

For we baby boomers who are concerned about our estates, the matter of the Federal Government repealing the estate tax has led to some prognostication; however, many believe that Congress will just freeze the UNIFIED CREDIT EQUIVELENT at some set amount. The amount of exemption has been steadily increasing over the years: In 2002 it was $1mm; In 2004 it was $1.5mm and beginning this year it is $2mm. In 2009 it is projected to be $3.5mm. What this means is the first $2,000,000 of your estate at death is not subject to Federal estate taxes. Anything over $2,000,000 is taxable.

Also, since 1981 the ANNUAL GIFT TAX EXCLUSION remained at $10,000. In 2002 it was increased to $11,000 and for 2006 the annual gift tax exclusion has increased from $12,000. This is a good way of gifting portions of your property to your children. You can do this in conjunction with establishing a Trust. You must remember to have a professional appraisal done every two years.

January 13th sale sets new record

One of the record breaking sales I told you would occur in 2006 has closed. The Waggaman property sale in Edgartown for $22,500,000 has broken the previous record set in 2001 when the Sharp property on Starbuck’s Neck in Edgartown sold for $21.5m.

Rental Bookings look strong for Summer 2006!

Some of my colleagues who specialize in vacation rentals are telling me bookings have been above average and very strong for this summer season. What that tells me is that there is still a lot of interest in this Island and many of those people who are here will be looking and possibly buying real estate. I think with the playing field becoming more level and some of the arrogance vaporizing from sellers, this will be a better year for sellers than I expected, but also a good years for savvy buyers --- that means you!

SplitRock RE welcomes Benjamin Onega as Sales Associate

I am extremely proud to announce that Benjamin Onega has joined SplitRock Real Estate. I have been looking for someone that would understand what is most important when it comes to representing Buyers --- SERVICE ABOVE SELF. Ben is a professional appraiser; he is knowledgeable in carpentry and construction and does a lot of volunteer work. I believe he will be a great asset to clients working with SplitRock Real Estate.

Misguided perception and advice from Seller Broker

As I am sure you know that producing this blog is not an easy task. It requires a lot of market awareness and research, but that is why you look to SplitRock Real Estate. I am realizing with the beginning of this new year and the paradigm shift created by actual and perceived changes in the market, as well as extended time on market coupled with the limitations of our MLS system, it is becoming more difficult for me to keep track of accurate information regarding properties for sale.

In particular, I am concerned about what I consider to be a misguided perception on the part of Seller Brokers. They advise sellers to remove their property from the market during what they consider to be the slowest period in the market, thereby erasing the time-on-market paper trail in the system for that property listing. In other words, they think they will have fooled the buying public into thinking the property is brand new and hot to the market. I know I have educated you to realize 1) in recent history it is most likely the seller who prices the property and, 2) the broker and seller have agreed that after a certain amount of time on the market the seller will acquiesce and reduce the price. The MLS system only records two price changes and after the second price change, the first one drops off the system. Once a property has been removed from the market it loses its history because in most cases the property will not be recorded as having been “off the market” at one point.

What I am trying to say is that I will always do my best to recall and report accurately on the changes in the market but, in particular, I must change the way I report “Price Changes”. Going forward I will primarily report the date of the last price change instead of the total period of time the property has been on the market. I cannot guarantee the sequence of events as it pertains to numerous price changes. However, as long as my flimsy memory holds together and I can remember properties that have been on the market before, I will alert you to that fact. I strongly suggest that you track the history of, and keep notes on, any property you are interested in.

As always, please visit my web site for the most up to date information and to sign up to receive my Inner Circle e-Newsletter.

- Peter Fyler