If the winter holiday season now begins with Halloween, and the Super Bowl kicks off the spring homebuying season, when do people begin looking in earnest for second homes?  

That starts the day after Christmas, according to the Private Community Registry, an online resource for folks looking for holiday houses. Visitors to the site increased 36 percent between December 2020 and January 2021, and requests for more information jumped 38 percent in that same period. 

Those figures were larger before the pandemic, but the virus forced people to stay home and do more research, according to company spokesman Ben Keal. 

For what it’s worth, most of PCR’s winter traffic comes from the chilly northeast states. As might be expected, visitors largely explore places in warm-weather states like Florida, Arizona and the Carolinas. 

The Permanent Temporary Fee 

When is something that’s supposedly temporary actually permanent? When it’s the “temporary” surcharge on the guarantee fees that homebuyers pay when their mortgages are purchased or secured by government-sponsored mortgage giants Fannie Mae or Freddie Mac. 

The 10 basis point add-on was enacted as part of the 2011 Temporary Payroll Tax Cut. After 10 years, it was supposed to expire on Sept. 30, but there is no evidence the two mortgage entities have stopped collecting the fee. 

About half of all mortgages are touched by Fannie or Freddie, meaning about half of all borrowers pay the guarantee fee. Now, to help pay for the $1 trillion bipartisan infrastructure bill, the add-on has been extended through 2032. Which kinda makes the “temporary” surcharge permanent, doesn’t it? 

Another Down Payment Resource 

Homebuyers may be able to use the reward points they’ve built up on their credit cards for down payments and closing costs. The points must be converted to cash prior to closing, and should be deposited in a bank. But otherwise, they’re acceptable – at least to Fannie Mae, which buys mortgages from originators and rolls them into securities for sale to investors worldwide. 

Fannie Mae also permits certain up-front costs paid early in the transaction – for example, lock-in fees, credit report fees and appraisal charges – to be charged to the borrower’s credit cards because they do not represent extraordinary amounts and credit card debt is considered in the borrower’s total monthly debt-to-income equation. 

There’s a maximum of 2 percent of the loan amount, but borrowers need not pay off these charges before settlement. 

Where Agents Outnumber Listings 

More signs of the apocalypse: Agents outnumber active listings by more than 3 to 1 in the Daytona Beach, Florida, area, according to data from the local Realtors association. 

The beachside community of 70,000 had just 674 houses listed for sale in September, with some 2,200 agents vying to sell them. And the entire Sunshine State isn’t much better: 212,000 agents are peddling 56,617 active listings.  

Meanwhile, a small 328-square-foot house in Santa Cruz, California, recently sold for – wait for it – $1.02 million. That’s $3,125 per square foot, the most ever in Northern California’s Santa Cruz County, for a place that isn’t right on the Pacific or on significant acreage. The house previously sold in 1999 for $250,000.  

Auction Opportunities? 

Would you consider buying a home at auction? If so, you’re not alone. Nearly two-thirds of people queried in a recent Harris Poll said they would be open to the option. 

Their main motivations were price and speed. Most believed they could save money by purchasing a house at auction, and a slight majority thought the process would be quicker. 

But another benefit is that if you have competition, at least you’ll know instantly what you’re up against. No waiting until the seller opens all the offers, considers the pros and cons of each, and then announces a decision. 

The poll of 3,000 consumers for ServiceLink, a Pittsburgh firm that provides digital services to the mortgage and finance industries, found that 10 percent of the respondents had already bought a place at an auction. Surprisingly, 28 percent didn’t know doing so was even an option. 

With the end of foreclosure moratoriums, ServiceLink suspects that home auctions will increase, as people who cannot make up their back mortgage payments decide to sell via auction rather than draw out the process. Indeed, Miriam Moore, who runs default services at the company, expects auction sales to “become more mainstream.” 

Meanwhile, a report from Auction.com said nearly half the houses sold at foreclosure auctions in the third quarter garnered more than sellers owed. The site also found that 4 out of 5 buyers were local, coming from within 100 miles of the properties purchased. 

Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at lsichelman@aol.com. 

Second Home-Shopping Season Starts Now

by Lew Sichelman time to read: 3 min