With Terry Story, 30-year veteran Real Estate Agent with Keller Williams in Boca Raton, FL
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Real Estate Survival Guide
Steve kicks off Real Estate Round-Up with his favorite segment, the Real Estate Survival Guide. In it, he gets Terry’s views on questions posed to Gary Singer by readers of the South Florida Sun Sentinel. Here’s a recent question:
I have been renting my apartment for six years using annual leases. This year, at renewal time, I asked to go on a month-to-month lease due to some maintenance concerns. The landlord agreed, we signed a month-to-month agreement that calls for a 30-day notice to terminate the lease. I just received a notice that the landlord wants me out in 30 days. I pay my rent at the beginning of each month, but the letter says they want me out in the middle of next month. Can he do this? And by the way, I always pay on time and the landlord has no reason to kick me out other than not wanting me to sign an annual lease. Is this okay?
Terry notes that landlords and tenants have to abide by what the contract says. In this case, the tenant switched to a month-to-month lease with rent payable at the beginning of each month. So, technically, the landlord cannot cut the tenant out mid-month but has to give the tenant 30-days to vacate from the beginning of the next month.
Steve adds that the tenant was concerned about maintenance issues and decided to change rental terms to month-to-month to put the landlord on notice. But the landlord saw this as an opportunity to raise the rent by getting a new tenant. So, be careful what you wish for!
Luxury Homeowners Are Downsizing
Changing gears, Steve refers to a Business Insider article about a Palm Beach real estate agent who is surprised by her multimillionaire clients’ requests to downsize their homes.
This doesn’t surprise Terry because she sees similar trends in her Boca Raton market. Luxury homeowners often have multiple properties and don’t want all their properties to be big. They want quality over quantity and will happily settle for a smaller home in a more interesting neighborhood.
Luxury homeowners simply do not want to deal with the hassles of managing multiple large homes, especially ones they only use for only a few months each year.
Rich people are prioritizing quality over space and are willing to spend upwards of $4,000 each month for luxury extended-stay hotels. Such hotels offer conveniences and amenities such as a kitchen fully stocked with cookware and utensils, fitness centers, dog walking, free bike shares, personal trainers, weekly housekeeping, and more.
For example, Oceanwide Plaza is a three-tower development in Los Angeles that is aimed at luxury homeowners. When complete, it will feature a two-acre sky park with two dog parks, a basketball court, lawns, a swimming pool, and a running track.
2019 Housing Market Outlook
In closing, Steve notes that we’ve been in a seller’s market since the crash of 2007. In the early part of the up-cycle, it was difficult to get a mortgage. Thereafter, sellers who had locked in really low mortgage rates weren’t keen on selling. That led to an inventory crunch, which made it more of a seller’s market.
Now, there’s more housing inventory coming to the market. Terry believes the housing market is now selectively transitioning to a buyer’s market, depending on the price point you look at.
For the luxury homeowner, million+ segment, it’s very much a buyer’s market. In the median price range, it’s a balanced market. And in the lower-price range, it’s still very much a seller’s market because of high demand and low mortgage rates.
But with luxury homeowners downsizing, Steve urges buyers not to wait on the sidelines while hoping for prices to drop. His advice is that if you see a home you like, you should snap it up because mortgage interest rates are still quite low and you may not find another home you like for years to come.
Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital. Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.
Steve Pomeranz: It’s time for Real Estate Roundup. This is the time every single week we get together with noted real estate agent, Terry Story. Terry’s a 30-year veteran with Keller Williams located in Boca Raton, Florida. Welcome back to the show, Terry.
Terry Story: Thanks for having me, Steve.
Steve Pomeranz: So, I, from time to time, actually week to week, [LAUGH] we do something called the Real Estate Survival Guide which happens to be my favorite segment.
Terry Story: Yeah.
Steve Pomeranz: And we usually use the questions that are answered by Gary Singer from the Sun Sentinel. And we’re doing that again today. So here’s a question: Can a landlord kick a tenant out in 30 days? Let me read it.
“I have been renting my apartment for six years using annual leases. This year at renewal time, I asked to go on a month-to-month lease due to some maintenance concerns. The landlord agreed, we signed a month-to-month agreement that calls for a 30-day notice to terminate the lease. I just received a notice that the landlord wants me out in 30 days. I pay my rent at the beginning of each month, but the letter says they want me out in the middle of next month. Can he do this? And by the way, I always pay on time and the landlord has no reason to kick me out other than not wanting me to sign an annual lease. Is this okay?”
Terry Story: Ah-ha. So, leases are contracts, right?
Steve Pomeranz: That’s right.
Terry Story: And landlords and tenants have to abide by what the contract says. So in this particular case, you’ve switched to a month to month. Now that your month starts in the beginning of the month, so technically, to answer that question, he can’t just cut you out in the middle. He has to give you 30 days from the beginning of the month, so-
Steve Pomeranz: Yeah, so let’s say it’s the middle of the month, and he sends you this notice. He’s going, I want you out in 30 days, which is the middle of the next month.
Terry Story: Correct.
Steve Pomeranz: According to this, that really can’t work that way.
Terry Story: Right.
Steve Pomeranz: Because you’re on a month to month lease, so it has to go to the following, the end of the month.
Terry Story: Correct, correct, so. But here’s what’s important, and we see a lot of people do this month-to-month a lot. And you can make whatever rules you want when you do a lease. But generally, typically, when it is a month-to-month, they get this question all the time. How much notice do I have to give if I am on a month-to-month?
Steve Pomeranz: Yeah.
Terry Story: And the law says 15 days.
Steve Pomeranz: Okay.
Terry Story: So-
Steve Pomeranz: Yeah, in this particular case, it said in the contract.
Terry Story: Correct, they had agreed-
Steve Pomeranz: 30 days.
Terry Story: to 30. You could agree to whatever you want.
Steve Pomeranz: Yeah.
Terry Story: But a lot of people don’t know the answer that question. That is the legal answer.
Steve Pomeranz: Yeah, as a person not in the real estate business, here’s how I took this. She was concerned about some maintenance issues; he wasn’t fixing something.
Terry Story: Right.
Steve Pomeranz: So she’s, you know what, I’m putting you on notice that this great renter that you have is so concerned we’re going month-to-month. Okay, and then you think, well, be careful what you wish for.
Terry Story: That’s right.
Steve Pomeranz: [LAUGH] ‘Cause he’s turning around going, you know what? Hey, this may be a good thing because-
Terry Story: This is an opportunity.
Steve Pomeranz: This is an opportunity for you to get somebody else in here and raise rents.
Terry Story: That’s right.
Steve Pomeranz: That doesn’t really know that these problems-
Terry Story: She didn’t play this card well.
Steve Pomeranz: Not really, not really. It was kind of a bit of surprise. What do you mean?
Terry Story: Yeah, what? I’m a good person. [LAUGH]
Steve Pomeranz: [LAUGH] Exactly.
Terry Story: It’s all about the money, I’m sorry.
Steve Pomeranz: Oh, well, of course, it is, of course, it is. All right, changing gears here, one very interesting article I saw from an interview with the Palm Beach real estate agent, says that she’s surprised that there’s a lot of requests from her multimillionaire clients for downsizing.
Terry Story: That doesn’t surprise me.
Steve Pomeranz: Why?
Terry Story: Because I’m seeing that in my own market. These sellers, owners of these large properties don’t want these large properties anymore. They want quality over quantity. And a lot of these people have multiple homes. So it’s really not a matter of, they own a big house in New York, they come down here, they don’t necessarily want that big big house anymore.
Steve Pomeranz: It’s like they have to run a corporation again, it’s very complicated, it’s a lot of moving parts. A lot of people to hire, to worry about paying properly, are they doing their job, you have to monitor. It’s a big deal, and people, I guess, don’t really want to do that anymore.
Terry Story: Right, they’re looking for simplicity, less is more. They say that all the time, less is more.
Steve Pomeranz: In this article, they talk about, many of them are going to these extended-stay hotel type things. So, in this article, it said for 4,000 a month, which you and me seemed kind of low.
Terry Story: Right.
Steve Pomeranz: But $4,000 a month, you get a lot of luxury entitlements. For example, you get a what? You get dog walking and fitness center, and then-
Terry Story: Valet parking, room service. [LAUGH]
Steve Pomeranz: They give you all the silverware that you need and everything that you don’t. I mean, it’s just personal trainers, weekly housekeeping, and all kind of things that comes in which is that lifestyle.
Terry Story: It’s attractive.
Steve Pomeranz: Yeah, yeah.
Terry Story: I think. I don’t know, I’ve never stayed at a luxury extended stay hotel. Have you? Well, in Los-
Steve Pomeranz: [LAUGH]
Steve Pomeranz: No, I haven’t. In Los Angeles, a three-tower development will feature, well, so it’s going to happen. A two-acre sky park with two dog parks, a basketball court, lawns, a swimming pool, and a running track. In Baltimore, there’s also an al fresco dining space, yoga and meditation room, and business lounge, so I don’t know.
Terry Story: Well, I’m glad they’re thinking about the dogs.
Steve Pomeranz: [LAUGH] Let’s talk about the market for 2019. We’ve been kind of in a seller’s market, mostly, really since the crash, right?
Terry Story: Yeah, absolutely.
Steve Pomeranz: The great recession as they call it.
Terry Story: Right.
Steve Pomeranz: And in the early part of that, it was difficult to get a mortgage. And then after a while, the sellers didn’t want to sell anymore because those that did get a mortgage locked into some really attractive rates. They didn’t want to have to flip that over plus they’re liking what they bought.
Terry Story: Right.
Steve Pomeranz: But so it’s been a seller’s market. But you’re seeing more inventory coming to your world.
Terry Story: That’s right.
Steve Pomeranz: We spoke about the fact that you normally have about 12 to 14 listings, and now you’ve got 25 listings, so there’s more sellers out there at least in your-
Terry Story: Right, in my little world.
Steve Pomeranz: Micro-world, right?
Terry Story: Right.
Steve Pomeranz: And if that happens then are we moving to a buyer’s market in 2019? What are your thoughts on that?
Terry Story: My thoughts are we are changing gears.
Steve Pomeranz: Like transitioning?
Terry Story: Transitioning, I don’t want to say it’s going to be a buyer’s market in 2019. I’m not ready to declare that.
Steve Pomeranz: Okay.
Terry Story: It takes some time, it is transitioning. I will say that it all depends on which market you’re talking about. And a lot of it is price point. So in our market down here, a million is luxury. And in the market above a million, we’re seeing very much a buyer’s market. In the median price range, we’re seeing a balanced market. And in the lower-priced property, we’re very much seeing it still as a seller’s market. So, the rate of growth is retracting the amount of appreciation.
Steve Pomeranz: Yeah, right.
Terry Story: And the inventory’s climbing which is great news. Very healthy for our real estate market. We need more inventory.
Steve Pomeranz: Yeah, so it’s all good.
Terry Story: So it’s good, it’s healthy.
Steve Pomeranz: It’s not good to have a market that continually increases in price. Whether it’s a stock market, the bond market, Bitcoin, or whatever it is. It’s indicative of speculation and wrong people being in there. We call it buying with weak hands.
Terry Story: Right. Now, this is an information to tell you if you’re a buyer, I’m going to sit and wait. Don’t sit on the sidelines because you are going to lose out.
Steve Pomeranz: No, you need to buy. When you’re ready to buy a house, a house you live in, a house you just have to buy, buy the right one and also interest rates have kind of stopped rising at this point.
Terry Story: Correct.
Steve Pomeranz: They come down actually a little bit so it’s making a little more attractive now that there’s more inventory, this is all really good news.
Terry Story: This is a good time to get back out there and look.
Steve Pomeranz: When is the best time to buy real estate?
Terry Story: Right now.
Steve Pomeranz: And when is the best time to sell?
Terry Story: Right now.
Steve Pomeranz: You surprise me every time you say that. My guest, Terry Story, [LAUGH] with Keller Williams, located in Boca Raton. And she can be found at terrystory.com. Thanks, Terry.
Terry Story: Thanks for having me, Steve.
