As houses have gotten more expensive and the area’s wealth has increased, the number of all-cash home buyers seems to be increasing, too.
The exact percentage tends to be a function of the market segment, but in the new sections of Country Club East at Lakewood Ranch, about 65 percent of buyers pay all cash for their roomy dream homes, said Peter Mason of Lee Wetherington Homes.
“Over the past six months, we have seen an increase in cash buyers,” Mason told me Tuesday as I previewed models on the Parade of Homes, which began Saturday and runs through March 8.
“Especially the relocating buyer, who is coming down after having either sold their home or sold their business,” Mason added. “They want to pay cash. They want to have that security and lack of payments.
“Now, they may choose to finance during the construction period with a jumbo loan at 4 percent on an ARM; they will take that for building. But when it comes to converting it at the end of the loan, they will cash it out.”
This trend is not so good for the lending industry. The perception among some buyers is that if they don’t need a mortgage, why go through the challenges of qualifying for one?
“The lending climate today is good,” counters Mike Rahn, a mortgage lender with Regions Bank who also is president of the Manatee Sarasota Building Industry Association, which puts on the Parade of Homes.
“The borrowers today are more educated about the process and are more prepared when they meet with their mortgage lender,” Rahn said, “thus making the process an easier one.
“Credit quality and the ability to repay are still the biggest concerns when a lender reviews a borrower. However, the process of obtaining a mortgage is not a difficult one as long is the borrower meets the standard guidelines set by Fannie Mae and Freddie Mac, which are the benchmark that every lender follows — unless the request is for FHA or VA loans, which have their own guidelines.”
We are not talking about affordable housing here. The land-house prices exceed $600,000 in the new Seacroft section in Country Club East. The models are $900,000 to $1 million.
Neal Signature Homes is building on smaller lots with prices of around $500,000 and up.
ONE STORY OR TWO?
Conventional wisdom holds that buyers who are retiring, or close to it, want a one-story house. Something about knees and ibuprofin. Peter Mason, standing in Lee Wetherington Homes’ Solivita model in Lakewood Ranch, says the conventional wisdom is not etched in stone.
“We will show the two-story model because the consumer can’t visualize what the second story will look like,” he said. “Surprisingly, we sell more two-stories than you would think. The consumers say they don’t want the steps, but then when they come in and look at it, they find they can live on one floor and have options. If they are in the market to have that kind of square footage, they take it.”
DOLPHIN HOUSE GETS NATIONAL EXPOSURE
The Wall Street Journal just published a feature on houses that have up-close views of wildlife, including a mountain home where moose often linger outside. Also featured is architect Carl Abbott’s Dolphin House on Siesta Key, where bottlenose dolphins feed at the mouth of Hansen Bayou as it flows in and out of Sarasota Bay. The feature is at www.wsj.com.
Readers of the Herald-Tribune may recall my feature on the house when it was listed for sale by Kim Ogilvie and Linda Dickinson of Michael Saunders & Co. in 2012. It eventually sold for $2.95 million, and yes, I did see the dolphins as I shot photos of the house.
