Monthly Archives: May 2013

SW Florida Real Estate Market Continues Its Upward Trend

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Official real estate sales numbers were recently released by Florida Realtors and as expected, median and average prices for single family homes rose again in April.

SW Florida Real Estate Market Continues Its Upward Trend
Median Sale Prices 2012-Present

The median sale price rose 29.8% over last year from $140,199 to $182,000 this year.  The average sale price rose 23.1% from $237,281 last April to $292,201 this year.  Prices have definitely risen this season; however they typically do this time of year.  We are comparing numbers of last year at same time, so it’s a legitimate 30% increase over last year.

SW Florida Real Estate Market Continues Its Upward Trend

April 2013 prices are up over March numbers which is also typical.  April’s $182,000 was up over March’s $168,000.  Going forward we’ll have to watch as last year prices hit their plateau before steadying out the rest of the year.

 

Home prices by price category in SW Florida
SW Florida Home sales by price category April 2013

When analyzing by price range again we see a drop in closed sales below $100,000 simply because there isn’t much inventory there as home prices have graduated higher.  Those some entry level or investment homes are just higher in price again this year.  Finding sub $100k priced homes is difficult at best.

When prices are rising people automatically assume it’s across the board and they can add 30% to last year’s home value regardless of what price range their home is in.  This simply is not true, although we have seen increased sales in almost every category.  The over $1 Million category continues to struggle.  The SW Florida real estate market is on the rise, but the overall economy may be holding back super premium prices combined with excess inventory in the $ 1Million+ category.

We’re really seeing excellent sales in the $200,000-$400,000 range.  That’s the sweet spot right now in Southwest Florida.  This may change in time, but right now that’s it.  With companies like Hertz moving to Estero and another company I’m hearing rumors about, this sweet spot could do very well for years to come.

Eventually the over $400,000 range will pick up more as well.  It’s doing OK, but if you remember back to the hay days, it seemed any new home in South Fort Myers was $400,000 and up.  Now you can get a pretty nice home for $400k.

The financial markets were spooked last week Fed reports that some Fed governors support raising interest rates by ending the government bond buying spree if we see continued economic development.  This would essentially raise rates.  While this will happen one day, I doubt there’s enough support to do it now.  This will eventually cut into buyer’s buying power when that happens.

Nationally home prices were up 10.2%.  SW Florida is absolutely leading the nation right now.  We did so back in the run-up.  The difference today is its sustainable and we’re still at or near replacement costs.  Back in the upswing in 2005 we were so far over replacement cost.  We were artificially too low in price for the last 7 years and the market has been correcting the past 3-4 years now.  Look for continued strength as we have positive economic news locally.  Keep your eye on national economic news and interest rates and we’ll let you know if we hear more details about landing another big company.  It really makes no sense to report on that unless and until it happens.  As you might have read, the Hertz deal almost didn’t happen, so we never believe anything until the ink is on the paper.

To find out what your home is worth online visit www.SWFLHomeValues.com  To search the MLS, visit www.LeeCountyOnline.com

Good luck and happy house hunting.

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Is Stock Market Ready to Make a Move?

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Is Stock Market Ready to Make a Move
Cost of Money Going Up

Is Stock Market Ready to Make a Move? If so, it could impact real estate.  The stock market has been buoyed by the fact money is cheap and there’s not been a better place to get a return.  People will be surprised to learn that interest rates have been ticking up.  Borrowing costs could go higher, and when they do, this could change the landscape of the stock market.

Will this translate into money flowing into Main Street like it has in past?  It could mean money going into bonds.  Money could flow into real estate from investors and REIT’s (Real Estate Investment Trusts) but it will also hurt average home buyers that will see their borrowing costs go up.

The same home at the same price will now cost more.  Let’s say a borrower is purchasing a $200,000 home and putting 10% down.  at 3.75% interest the principal and interest portion of the payment would be $833.61.  If rates rise to 4% the payment increases to $859.35.  That’s a difference of $25.74.  Over 30 years that adds up to $6,692.40  a 1/4% rate hike costs borrowers purchasing power.

This can adversely affect sellers too.  As a seller you never want borrowers purchasing power to be diminished.  The bottom line for buyers is they should seriously think about buying sooner rather than later.  Prices are rising and so are rates.  Even if prices stayed same, it will cost money to wait.

Over the next few days the stock market may rise and fall.  We’d expect it might fall but you never know.  What is certain is the government has stopped buying down rates, and rates will go up.  How you react will affect your buying power, and today your buying power may be better than it is in the future.

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Memorial Day in SW Florida

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Most of us will be out celebrating a 3 day weekend having fun enjoying our families and/or a little time off, as we should.  Life is tough and we deserve it.  Let’s not also forget why we have this holiday.  Memorial Day originally started as Declaration Day.  Several states lay claim to the first Memorial Day, and there was even dissent as the south refused to celebrate Memorial Day after the civil war.

Memorial Day in SW Florida

While history can be fascinating, what’s even more important is the present.  Memorial Day represents honoring those that have served our country.  It’s always sad when some people refuse to honor certain veterans because they disagreed with a conflict or war.  We owe our freedom to veterans.  Our veterans didn’t get a chance to select which conflict or which war they would serve in.  They just served, for us, for the United States of America, just because.  They didn’t ask questions.  Nobody would listen if they did.

First responders at the Boston Marathon or in Oklahoma or Texas didn’t get the chance to pick which disaster they’d respond to, they just did what was needed regardless of how scarred they’d be for dealing with the scene.  The same is true with our veterans.

While you’re out there having fun this weekend, take a moment to visit a grave, or say thanks to an existing veteran, or just remember in your own special way.  It’s the least we can do. We honor our fallen, but let’s also celebrate life.

Personally I’m thankful our SW Florida real estate market is recovering.  Really I’m thankful for so much more.  After watching my dad battle cancer courageously for 6+ years I’m reminded that life is precious.  Celebrate precious moments this weekend with friends and family.  You never know in the blink of an eye when things can change.

My dad was robbed from cancer.  No better way to put it.  But so are people with Aids, other diseases, tornado and other natural disasters, etc.  The list goes on.  There is no good way to make sense of it all.  The universe doesn’t care about any one of us.  I often ask what God’s plan was when a school full of children was leveled.  The answer may never make sense to us humans, and we’ll never understand.  There must be a purpose for us.  Every one of us has been touched by death and disaster.

We do not know how much time we have here on earth.  All we control really is how we treat others, how we enjoy the time we have, and how we honor those that served for our benefit.

So please, take a moment to thank a veteran, or a surviving spouse.  Display your flag.  Hug your kids.  Say I love you to a loved one.  Pick up the phone and call someone dear to you that you haven’t spoken to in awhile.  Say all the things you’d want to say if today was your last day on earth.  If that blink comes, you won’t get that chance tomorrow.

Remember that our veterans didn’t always get that chance.  Most were separated from their families in a foreign place.  Most spoke by written mail and an occasional phone call, and they sacrificed for us.

For us at home enjoying our freedom and our weekend, we have it all.  It’d be such a shame not to pay some respect.  Such a shame not to say things you’ve wanted to say.

Remember it’s up to us to take care of each other.  After thanking a veteran, the biggest honor we can bestow is to make this a better place.  Enjoy your weekend, spend time with family, and honor America, a country of freedom worth fighting for!

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Memorial Day in SW Florida

 

Hertz Deal Underscores Importance of Confidentiality

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If you haven’t read the News Press story “Anatomy of the Deal” about Hertz selecting Lee County Florida to relocate its world headquarters to you’re missing out on some fascinating behind the scenes tales full on mystery, intrigue, and suspense as if it was right out of a top selling suspense novel.  Hertz Deal Underscores Importance of Confidentiality.Hertz Deal Underscores Importance of Confidentiality

It was fascinating to read about how that deal transpired from beginning to end.  It further underscores why confidentiality is a requirement in deals like this.

In the past we’ve worked with professional athletes, movie stars, and other famous people so we’ll shed a little light on some things people don’t always think about confidentiality.

We had two athletes who played in many Super Bowls interested in buying property in SW Florida.  They both purchased and one bought multiple properties because of the confidentiality extended to them.  One man was rather large and tall, in excess of 340 lbs.  Before he came to SW Florida we sent him video tapes of selected properties that met his needs.  We’d go out and video the properties on his behalf.

At one SW Florida community the salesperson stopped us and said they would do the taping for us, that we were not good enough and they wanted to show their product in the Best possible way.  We’re sure they would have done a marvelous job, but what they didn’t realize who the client was and what they were looking for.

We were videoing entrances to the closet so he could tell if he would fit.  The same was true with doorways and bathrooms.  The salesperson thought we were nuts and not very good, but we knew what was important to him.  He knew we selected nice properties, but they were no good to him if he couldn’t enjoy life within the property.  That’s what he wanted to see.

We couldn’t disclose who the buyers were as they were fairly well known and they valued their privacy.  They wanted to come down to SW Florida and enjoy it, not be mobbed by fans or interested onlookers.

A few years ago I heard a rumor that Kenny Chesney was looking at property in Key West but nixed the deal when word got out he was buying.  I have no idea how true this rumor was but it could be as famous people like to keep secret what they’re doing for as long as possible.

I remember negotiating land deals and in many cases the original contract was an unnamed buyer.  Sellers don’t like this but there were reasons.  Children’s Miracle Network wanted to build a facility but needed confidentiality.  We met with company representatives out of state and began the process.  They knew that we were contributors to the network as we had contributed money from every Ellis Team closing to CMN for years.  We still do today.  Sande is a CCIM so they wanted local expertise and someone they could trust. They knew we believed in them and they believed in us.  Their facility now sits on Colonial Blvd and helps children from all over SW Florida and reduces many trips to Tampa.

We worked with builders who were competing with other builders for communities so they didn’t want it known which land parcels they were bidding on.  If word got out, prices could go up or another builder could speed up a development order and take away chances another community would be allowed given the existing road and water resources.

In the case of Hertz, employees back home hadn’t been told yet.  Tulsa was a competitor to SW Florida.  I can just imagine many from NJ wouldn’t move to Oklahoma, and many from Oklahoma wouldn’t go to NJ.  SW Florida just seems like a nice place key employees from either might go to, and we agree.

In the end, it all worked out for SW Florida.  We weren’t in the know in this deal, and that’s OK.  We didn’t need to be, and neither did anybody who wasn’t closely involved.  Companies choose locations for their reasons.  The fact that we all found out who the mystery company was the day it was announced served everyone well, and that’s the way it should be.  Relocation is a stressful thing and involves a lot of people so it wouldn’t do a lot of good getting people riled up about various locations.  7 sites were considered locally for Hertz.  Imagine the public interest had Hertz been revealed and speculation as to which location was selected.

Welcome to Southwest Florida Hertz.  We think you’re going to like it here.  I know I’m joining the Hertz #1 Club.  We hope everyone here does too.

Boomerang Buyers Heating Up the Housing Market

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More than 4.7 million homeowners lost their homes to foreclosure or short sale since 2007 nationwide and they’re not taking it anymore.  What are they doing about it?  They’re buying again, and they’re buoying the housing market from coast to coast. Boomerang Buyers Heating Up the Housing Market!

Boomerang Buyers Heating Up the Housing Market
Boomerang Buyers

 

SW Florida certainly saw its share of financial hardship.  Scores of homeowners were forced to short sale or were simply foreclosed upon as the local housing market dived and jobs were lost. Many left the area in search of work.

As the economy has slowly improved over the past few years some of those same people are moving back.  Still others who never moved rented and kept their companies going anyway they could, or worked multiple jobs to survive.  It’s been a tough 7 years for many locals, so it’s no wonder there is much joy in a rising real estate market.

As the market improves so does the economy as sales lead to jobs and construction.  Construction leads to construction jobs and ancillary businesses, which leads to further opportunities.

Many SW Florida homeowners are still underwater even though prices are rising.  They’re essentially trapped in their own homes waiting the market out for a time when they can afford to sell.  A Boomerang buyer is free from the trap because they got out from under the crushing debt years ago.  Lenders at the time said it would take 2-5 years before they could buy again but many had no choice. They had to sell.

Boomerang buyers took a hit on their credit reports and it did prevent them from buying, but they were released from the debt, and once could argue many of these buyers will be in a position to purchase well before some of the trapped homeowners will be.

I just had 2 Boomerang buyers contact us in the past week asking about re-entering the housing market as their business has finally picked up.  I checked with a few lenders to see what the requirements are and found varying requirements.

Chase requires 36 months after a short sale which is fairly typical. I checked with two local mortgage brokers who can lend 2 years after a short sale provided borrower has 20% down. If the borrower only has 10% down it’s 4 years, and can be as much as 7 years with less than 10% down which makes FHA attractive.  A FHA loan is 3 years, and VA is 0-1 years while USDA is 1.5-3 years.

If you’re not confused by now you probably worked in finance at some point in your life. The bottom line is there are options for you if you’re ready to re-enter the housing market.  How long you have to wait depends on which program you finance under and how much you can put down.  FHA, VA, and USDA will be the least down payment required.

Rates are low and prices are on the increase, and now that Hertz has announced they are relocating their world headquarters to Lee County, things are looking up.  Inventory supply is already tight.  I would suggest if you’re thinking about re-entering the market, sooner is probably better than later.

There is opportunity in this market.  Even though prices are rising, they are nowhere near where they were at the height of the market.  Combine that with today’s rates and buying power is strong.  I would argue this market is much healthier and sustainable than it was at the height when everybody was buying.  The herd was wrong at the top of the market.  This, right now, today is the land of opportunity.

I’m not quite sure why people call back in 2005 the “Good Old Days.” There was no real opportunity back then, only heartache to come for so many.  2013 is the “Good Old Days.”  Today is the land of opportunity, and even if you were hurt in the market in the past, you too can benefit going forward.  We all suffered the last 7-8 years, and now we can all benefit.

The hangover is over, so raise your glass and toast to a new beginning, especially for the Boomerang Buyers.

 

Hertz Moving Headquarters to Estero Florida

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Hertz Moving Headquarters to Estero Florida

Hertz released the following press release:

LEE COUNTY, FL –

The Fortune 500 company bringing over 700 jobs to Lee County has been revealed.

The Hertz Corporation today announced that the company will relocate its worldwide headquarters to Estero, Florida from Park Ridge, New Jersey.

“This is truly the largest economic event in Lee County’s history and we’ve been established since 1887; that is no understatement,” said Lee County Commissioner Frank Mann.

Hertz CEO Mark Frissora was at Southwest Florida International Airport with Governor Rick Scott to make the announcement.

“We are so grateful for this welcome to the Sunshine State,” Frissora said. “We did not make the decision to relocate lightly. We wanted to know that Florida was not only attractive to us as a company, but also to our employees.”

He added that some of the executives will be moving down immediately. Until the Estero location is built, they will be working out of a temporary location – likely in North Naples.

Hertz made the decision following its recent acquisition of the Dollar Thrifty Automotive Group, which was finalized on November 19, 2012.

 

Dollar Thrifty is currently headquartered in Tulsa, Oklahoma. Consolidating the corporate offices to one location will allow for increased efficiencies and cost synergies across the company.

Additionally, access to the Florida travel and tourism population will position the company for long-term growth.

According to Visit Florida, there are approximately 1 million employees in the state’s travel and tourism industry, Florida’s largest business segment.

Hertz also noted that Orlando is the world’s largest car rental market, and that Miami is a hub for accelerating travel growth between the United States and Latin America.

Starting this year, up to 700 jobs will be relocated to Florida over a two-year period. More than 2,000 Hertz and Dollar Thrifty personnel will remain in New Jersey, including approximately 150 employees who currently work in Park Ridge.

All other Park Ridge employees will be able to retain their current positions at the new headquarters, scheduled to be completed in early 2015.

Hertz was founded in Chicago, Illinois in 1918, and moved its headquarters to New Jersey from mid-town Manhattan in 1988.

“After our recent business expansion, we have been looking for the right location to blend Hertz and Dollar Thrifty head office employees,” Frissora said.

“Florida is the center of the U.S. travel and tourism industry – this move enables us to be closer to leisure and business customers, as well as many travel and association partners. As part of this move, we will open off-airport and retail car sales stores on our headquarters campus, which will enable us to experiment with new services and monitor customer satisfaction first hand. Lee County, on the Southwestern Gulf Coast of Florida, is a well-established travel destination with tremendous growth potential, with easy access to other leading tourism markets including Orlando, Miami/Fort Lauderdale and Tampa/St. Petersburg.”

Hertz and Dollar Thrifty have more employees in Florida than in any other state except California, and Florida rents more cars per capita than any other state.

Florida provides ready access to a vast and diverse talent pool, including 3,000 of our own employees, as we grow our businesses. All of these factors supported the company’s final decision.

Frissora added, “This is the best, most balanced business decision based on market factors as well as the needs of our employees and customers. The relocation results in a positive financial return to the company and we will provide more details during our next quarterly earnings call. Additionally, in no way should this decision be perceived as a slight to our partners in New Jersey and Oklahoma. We recognize the significant efforts undertaken in recent years in both states to create and retain jobs, while improving the overall business climate. In particular, over the last several years we have seen significant improvement in New Jersey’s business climate and our decision should not be interpreted as a reflection of our views about doing business in the Garden State. New Jersey has been our home since 1988 and would have been for countless more if not for our acquisition of Dollar.

 

Because of these efforts, we will continue to grow our car and equipment rental businesses in New Jersey and Oklahoma. We are retaining e-commerce and certain financial functions in northern New Jersey thanks to the state’s strength in the financial services industry. Oklahoma will continue to be our primary home for IT, customer service and financial support driving our North American businesses. Overall, we concluded that it is in the best interests of our company, which is primarily in the travel and tourism business, to be near our largest market.”

“We also want to note that the New Jersey Partnership for Action was very active and effective in their efforts to entice us to remain in New Jersey, and we are grateful for their efforts.”

Hertz chose Lee County, Florida, primarily because of its diverse community appeal, work force availability and accessibility.

The company worked closely with Florida Governor Rick Scott as well as other state and county government and business leaders throughout the decision-making process.

“This is exactly the kind of opportunity the county should be looking at in terms of how can we conduct ourselves with business as a government,” said Lee County Commissioner Larry Kiker.
Dollar Thrifty Automotive Group
NBC-2.com WBBH News for Fort Myers, Cape Coral

 

SW Florida Real Estate market Update

Brett Ellis Bio

Inside the SW Florida Real Estate Market Numbers

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Last week we reported that prices were up in March over last year’s numbers and listings were down, but that doesn’t tell the whole story.

This article won’t tell the whole story either as no one article could, however we would like to dig a little deeper and explain some factors influencing the market.

Over the years foreclosures and short sales weighed down the market, and in fact prices became artificially too low as homes were selling well below replacement cost. This has impacted builders not being able to build until recently. Prices have risen such that some home builders are able to build again.

Inside the SW Florida Real Estate Market Numbers

 

As you can see from the graph, traditional sales picked up 8.2% while foreclosures fell 34.5% and short sales fell 45.1% This has led to an increase in prices as the artificial factors influencing prices to the down side are drying up. Median sale prices for traditional sales are up 9.5% over March 2012 numbers and foreclosure prices are up 18.9%. Both pale in comparison to the 42.7% increase in the media sale price of a short sale. You can see the downward pricing pressure has abated, and the rising tide is lifting all boats, even distressed sales.

Estero, Bonita Springs, Fort Myers and Cape Coral home sales by price range
Home Sales by Price Range

Inside the SW Florida Real Estate Market Numbers

If we dig deeper and look at closed sales by price range you’ll quickly notice homes priced under $100,000 are down sharply. That’s not because there isn’t demand but rather limited supply as prices have outgrown this category.

You’ll probably notice the biggest winner is the $250,000-$300,000 category as sales jumped 43.7% in this range alone. Sales are down in the $150,000-$200,000 range simply because it’s getting harder to find those homes on the market. Most of these same homes have graduated into the over $200,000 range from last year.

Most all price ranges saw increases except for the over $1 Million category. Even though the overall market is improving, the overall economy remains a drag on expensive luxury homes. There is still a market, but not a market in which to over-price. All price ranges are sensitive, and the $ 1 Million+ market is no exception. We would expect to see some increases in the over $1 Million range going forward.

Typically activity increases the first half of the year and data is only month by month through March. April may turn in some really good numbers too. Many sales occur through Easter and Easter was early this year. Visitors seemed to remain heavy at the beaches and Sanibel and Captiva even after the heavy selling season. This could bode well for tourism dollars and help local residents who run businesses here.

In April, May and June we’ll see the final results of those February and March sales, so stay tuned. Listing calls are picking back up again, at least here at the Ellis Team. Inventory is down so now is a good time to sell even if we don’t have as many visitors here looking today as we did a few months ago. Many may come back in the summer and complete a purchase because their interest was piqued back in season.

If you’ve got a property to sell, please give us a call, we can help. Our marketing works. In some price ranges we literally have difficulty finding more than 2 or 3 properties that match buyer’s criteria. We can be reached at 239-489-4042 or visit our website at Topagent.com

Today the Hertz Corporation announced it is relocating its world headquarters to Lee County Florida which will bring over 700 jobs to SW Florida at an average wage of $102,000.  This will help an already improving real estate market in the Fort Myers, Cape Coral, Bonita Springs, Estero real estate markets.

April SW Florida Real Estate Market Update

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Phone calls were down the week after Easter according to most agents we’ve talked to.  Some say the roads are easier to travel and some still see busy traffic.  We noticed heavy traffic at the beaches the week after Easter and still heavy on Sanibel and Captiva Islands this past week. April SW Florida Real Estate Market Update.

The Ellis Team sold so many listings during season we didn’t even have enough to fill an ad.  This past week or two listing calls have picked up and we are listing again.  It’s no wonder we’ve seen price gains as inventory has dropped a bit.

April SW Florida Real Estate Market Update
Current Inventory

As you can tell from the inventory chart, single family home inventory is down below last year’s numbers.  It will be interesting to track and see if April’s numbers fall below last year’s numbers.  I suspect they will if our Team numbers are any indication. If April numbers do drop we’ll have to wait and see if we test market lows in July.  Lower inventory has led to higher prices.

Fort Myers and Cape Coral real estate prices moving up
SW Florida Real Estate Prices Headed Higher

Average sale price numbers dropped just a bit from February but they’re still up 12.8% over last year’s numbers.  Median sale prices continue to climb, up 29.2% over last year and up 9.17% over February of this year.  Last year median sale prices rose through April then leveled off before rising again this January.  We’ll continue to watch that trend this year as well.

As you can see from the pricing graph, average sale prices dropped from May through August.  This is not unusual as many higher priced properties sell in season.  We’ll keep an eye on average and median sale prices the rest of this year.

This past week I worked on a condo listing at The Club at Crystal Lake, which is a nice condo project in South Ft Myers.  I was able to pull up sold comparables but it was interesting that there were no active listings on the market.  The only listing was an active contingent short sale which means they’re waiting on the bank to approve or deny a short sale.  It was rather strange to not find one available listing on the market.

And so it goes in some communities.  There just isn’t the inventory we used to have.  Buyers from up North are disappointed when they find out their criteria is too restrictive to match any properties.

We had one buyer come to us who fired their Realtor because they weren’t working to find them properties.  We had to educate them that their Realtor wasn’t doing a bad job and that their expectations were not realistic.  What they wanted today doesn’t exist at that price range.  It did a few years ago but the market has passed them by.

Just yesterday I received a buyer lead looking for a 55+ community up to $100,000 within walking distance to the beach.  I assigned the lead to one of our buyer agents.  Without doing the MLS search myself, my guess is it will be hard to fulfill those demands.

The bottom line is the market is on the move.  If you’re interested in buying or selling it pays to watch the trends.  You never want the market to pass you by.  Now may be the time to move on those wishes.  Waiting today may mean you’ll be waiting next year because you can’t afford the new market reality.  If you’d like to sit down and discuss your options, give us a call at 239-489-4042  It might be a better idea to have a conversation this year versus next year.  Good luck and Happy House Hunting!