Florida’s existing home, condo sales up in October 2009
ORLANDO, Fla. – Nov. 23, 2009 – Florida’s existing home sales rose in October, marking 14 months that sales activity has increased in the year-to-year comparison, according to the latest housing data released by Florida Realtors®. October’s statewide sales also increased over sales activity in September in both the existing home and existing condominium markets.
Existing home sales rose 45 percent last month with a total of 15,160 homes sold statewide compared to 10,444 homes sold in October 2008, according to Florida Realtors. Statewide existing home sales last month increased 5.1 percent over statewide sales activity in September.
Florida Realtors also reported an 82 percent increase in statewide sales of existing condos in October compared to the previous year’s sales figure; statewide existing condo sales last month rose 6.1 percent over the total units sold in September.
All of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales and higher condo sales in October. A majority of the state’s MSAs have reported increased sales for 16 consecutive months.
Florida’s median sales price for existing homes last month was $140,300; a year ago, it was $169,700 for a 17 percent decrease. Housing industry analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less. The national median sales price for existing single-family homes in September 2009 was $174,900, down 8.1 percent from a year earlier, according to NAR. In California, the statewide median resales price was $296,090 in September; in Massachusetts, it was $290,000; in Maryland, it was $261,718; and in New York, it was $213,900.
According to NAR’s latest industry outlook, the housing market is continuing its positive momentum. “We’re getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth,” said NAR Chief Economist Lawrence Yun. “That, in turn, would help fully remove consumer fears, which would then revive the broader economy.”In Florida’s year-to-year comparison for condos, 5,398 units sold statewide last month compared to 2,958 units in October 2008 for an 82 percent increase. The statewide existing condo median sales price last month was $105,200; in October 2008 it was $147,900 for a 29 percent decrease. The national median existing condo price was $175,100 in September 2009, according to NAR.Interest rates for a 30-year fixed-rate mortgage averaged 4.95 percent last month, a significant drop from the average rate of 6.20 percent in October 2008, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s smaller markets, the Gainesville MSA reported a total of 172 homes sold in October compared to 130 homes a year earlier for a 32 percent increase. The market’s existing home median sales price last month was $156,700; a year ago it was $173,300 for a 10 percent decrease. A total of 22 condos sold in the MSA in October, up 22 percent over the 18 units sold in October 2008. The existing condo median price last month was $116,700; a year earlier, it was $133,300 for a 12 percent decrease.
Monday, November 23, 2009
Monday, September 21, 2009
Goood News
Households’ Net Worth Rises for First Time in Two Years
By Rex Nutting
RISMEDIA, September 21, 2009—(MCT)—American households were $2 trillion richer on June 30, 2009 than they were three months earlier, the first time in two years that household net worth has increased, the Federal Reserve recently reported.
Household wealth rose in the second quarter at a 17% annual rate, or $2 trillion, to $53.1 trillion after falling at a 13% rate in the first quarter, the Fed said. It was the first time since the second quarter of 2007 that wealth had increased. Net worth is down $12.2 trillion from the peak in 2007, an indication of how much the collapse in stock prices and home prices have hurt. The figures are not adjusted for inflation.
Net worth is defined as assets minus liabilities. Assets rose by $2 trillion to $67.2 trillion. Liabilities fell by $34 billion to $14.1 trillion. The rally on Wall Street was the main reason for the increase in household wealth, but rising home prices contributed as well. Wealth in corporate equities rose by $1.04 trillion, while real estate wealth rose by $139 billion. Assets held in mutual funds, life insurance and pension funds rose by $1.06 trillion. Households had lost real-estate wealth for nine consecutive quarters before the second quarter’s gain.
Consumers continued to pay down debts or have their debts written off at a record pace. In the second quarter, household debt fell at a 1.7% annual rate to $13.7 trillion, matching the record percentage decline in the fourth quarter. Household debt has fallen four quarters in a row and is down 5% from the peak. Before this recession, household debt had never declined in any quarter dating back to 1952.
Stimulus payments boosted disposable incomes by 5.2% annualized to $10.9 trillion annually. It was the first increase since the stimulus payments in the second quarter of 2008. Over the past four quarters, disposable incomes fell 0.6%, the first year-over-year decline on record dating back to 1952.
Household debt dropped to 126% of disposable income from 128% in the first quarter and a record 131% in the first quarter of 2008. In 2000, it was 91%.
Household mortgage debt fell 1.4% annualized to $10.4 trillion, the fifth consecutive decline in mortgage debt. Consumer credit fell at a 6.1% annual rate to $2.5 trillion. It was the largest percentage decline in consumer debt since 1980. In a separate report, the Fed has said consumer credit declined even faster in July, dropping at a 10.4%.
Total debt in the economy grew at a 4.9% annual rate, boosted by massive debts taken on by the federal, state and local governments. Federal government debt rose at a 28.2% annual rate, the fourth straight increase of more than 20%. In the past year, federal debt rose by $1.9 trillion to $7.2 trillion. State and local borrowing rose at an 8.3% annual rate in the quarter to $2.3 trillion. Nonfinancial business debt fell at a 1.8% annual rate, despite a 1% increase in corporate debt. The net worth of nonfarm nonfinancial companies fell at a 175 annual rate, the seventh consecutive decline.
Debt of domestic financial firms fell at a 12.2% annual rate to $16.5 trillion, the largest percentage decline since 1961.
(c) 2009, MarketWatch.com Inc.Distributed by McClatchy-Tribune Information Services. Read more: http://rismedia.com/2009-09-20/households-net-worth-rises-for-first-time-in-two-years/#ixzz0RkfGPQSy
By Rex Nutting
RISMEDIA, September 21, 2009—(MCT)—American households were $2 trillion richer on June 30, 2009 than they were three months earlier, the first time in two years that household net worth has increased, the Federal Reserve recently reported.
Household wealth rose in the second quarter at a 17% annual rate, or $2 trillion, to $53.1 trillion after falling at a 13% rate in the first quarter, the Fed said. It was the first time since the second quarter of 2007 that wealth had increased. Net worth is down $12.2 trillion from the peak in 2007, an indication of how much the collapse in stock prices and home prices have hurt. The figures are not adjusted for inflation.
Net worth is defined as assets minus liabilities. Assets rose by $2 trillion to $67.2 trillion. Liabilities fell by $34 billion to $14.1 trillion. The rally on Wall Street was the main reason for the increase in household wealth, but rising home prices contributed as well. Wealth in corporate equities rose by $1.04 trillion, while real estate wealth rose by $139 billion. Assets held in mutual funds, life insurance and pension funds rose by $1.06 trillion. Households had lost real-estate wealth for nine consecutive quarters before the second quarter’s gain.
Consumers continued to pay down debts or have their debts written off at a record pace. In the second quarter, household debt fell at a 1.7% annual rate to $13.7 trillion, matching the record percentage decline in the fourth quarter. Household debt has fallen four quarters in a row and is down 5% from the peak. Before this recession, household debt had never declined in any quarter dating back to 1952.
Stimulus payments boosted disposable incomes by 5.2% annualized to $10.9 trillion annually. It was the first increase since the stimulus payments in the second quarter of 2008. Over the past four quarters, disposable incomes fell 0.6%, the first year-over-year decline on record dating back to 1952.
Household debt dropped to 126% of disposable income from 128% in the first quarter and a record 131% in the first quarter of 2008. In 2000, it was 91%.
Household mortgage debt fell 1.4% annualized to $10.4 trillion, the fifth consecutive decline in mortgage debt. Consumer credit fell at a 6.1% annual rate to $2.5 trillion. It was the largest percentage decline in consumer debt since 1980. In a separate report, the Fed has said consumer credit declined even faster in July, dropping at a 10.4%.
Total debt in the economy grew at a 4.9% annual rate, boosted by massive debts taken on by the federal, state and local governments. Federal government debt rose at a 28.2% annual rate, the fourth straight increase of more than 20%. In the past year, federal debt rose by $1.9 trillion to $7.2 trillion. State and local borrowing rose at an 8.3% annual rate in the quarter to $2.3 trillion. Nonfinancial business debt fell at a 1.8% annual rate, despite a 1% increase in corporate debt. The net worth of nonfarm nonfinancial companies fell at a 175 annual rate, the seventh consecutive decline.
Debt of domestic financial firms fell at a 12.2% annual rate to $16.5 trillion, the largest percentage decline since 1961.
(c) 2009, MarketWatch.com Inc.Distributed by McClatchy-Tribune Information Services. Read more: http://rismedia.com/2009-09-20/households-net-worth-rises-for-first-time-in-two-years/#ixzz0RkfGPQSy
Wednesday, August 5, 2009
Bye bye gloom and doom!!
I thought I would pass on this tidbit from RisMedia. Interesting if you're tirred of gloom and doom.
RISMEDIA, August 5, 2009-Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 3.6% to 94.6 from an upwardly revised reading of 91.3 in May, and is 6.7% above June 2008 when it was 88.7. The last time there were five consecutive monthly gains was in July 2003.
Lawrence Yun, NAR chief economist, said a combination of positive market factors is fueling the gains. “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” he said. ”Because it may take as long as two months to close on a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30.”
The Pending Home Sales Index in the Northeast rose 0.4% to 81.2 in June and is 5.8% above a year ago. In the Midwest the index increased 0.8% to 89.9 and is 11.6% above June 2008. The index in the South jumped 7.1% to 100.7 in June and is 8.9% higher than a year ago. In the West the index rose 2.9% to 100.4 but is 0.2% below June 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, is hopeful that a recently elevated level of contract cancellations will ease. “Last month, Freddie Mac and Fannie Mae clarified that appraisals should be done by professionals with clear local expertise,” he said. “This should mitigate the situation of many valuations done by out-of-area appraisers coming in below the price negotiated between buyers and sellers. Hopefully, in the months ahead, we’ll see an even closer relationship between contract activity and closed transactions.” McMillan said NAR is continuing to press the appraisal issue. “We have asked Congress and the Federal Housing Finance Agency to immediately implement an 18-month moratorium on the new appraisal rules to further address unintended consequences of the new guidelines,” he said.
NAR’s Housing Affordability Index (HAI) remains very favorable. The affordability index stood at 159.2 in July, down from record peaks in recent months but it remains 36.6 percentage points above a year ago. Under these conditions the typical family would devote 15.7% of gross income to mortgage principal and interest, well below the standard allowance of 25%. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.“A monthly rise in home prices and somewhat higher mortgage interest rates led to a modest decline in affordability in June, but it was still the sixth highest index on record dating back to 1970,” Yun said. “Because housing is so affordable in today’s market, job security and the first-time buyer tax credit are bigger factors in influencing home sales.”
A median-income family, earning $60,700, could afford a home costing $289,100 in June with a 20% downpayment, assuming 25% of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80% of what a median-income family can afford. The affordable price was much higher than the median existing single-family home price in June, which was $181,600.
Yun expects existing-home sales to gradually rise over the balance of the year, with conditions varying around the country. “It appears home sales are on a sounder footing and inventory is gradually being absorbed.”
Read more: http://rismedia.com/2009-08-04/pending-home-sales-up-for-fifth-consecutive-month/#ixzz0NJfNWWIR
RISMEDIA, August 5, 2009-Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 3.6% to 94.6 from an upwardly revised reading of 91.3 in May, and is 6.7% above June 2008 when it was 88.7. The last time there were five consecutive monthly gains was in July 2003.
Lawrence Yun, NAR chief economist, said a combination of positive market factors is fueling the gains. “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” he said. ”Because it may take as long as two months to close on a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30.”
The Pending Home Sales Index in the Northeast rose 0.4% to 81.2 in June and is 5.8% above a year ago. In the Midwest the index increased 0.8% to 89.9 and is 11.6% above June 2008. The index in the South jumped 7.1% to 100.7 in June and is 8.9% higher than a year ago. In the West the index rose 2.9% to 100.4 but is 0.2% below June 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, is hopeful that a recently elevated level of contract cancellations will ease. “Last month, Freddie Mac and Fannie Mae clarified that appraisals should be done by professionals with clear local expertise,” he said. “This should mitigate the situation of many valuations done by out-of-area appraisers coming in below the price negotiated between buyers and sellers. Hopefully, in the months ahead, we’ll see an even closer relationship between contract activity and closed transactions.” McMillan said NAR is continuing to press the appraisal issue. “We have asked Congress and the Federal Housing Finance Agency to immediately implement an 18-month moratorium on the new appraisal rules to further address unintended consequences of the new guidelines,” he said.
NAR’s Housing Affordability Index (HAI) remains very favorable. The affordability index stood at 159.2 in July, down from record peaks in recent months but it remains 36.6 percentage points above a year ago. Under these conditions the typical family would devote 15.7% of gross income to mortgage principal and interest, well below the standard allowance of 25%. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.“A monthly rise in home prices and somewhat higher mortgage interest rates led to a modest decline in affordability in June, but it was still the sixth highest index on record dating back to 1970,” Yun said. “Because housing is so affordable in today’s market, job security and the first-time buyer tax credit are bigger factors in influencing home sales.”
A median-income family, earning $60,700, could afford a home costing $289,100 in June with a 20% downpayment, assuming 25% of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80% of what a median-income family can afford. The affordable price was much higher than the median existing single-family home price in June, which was $181,600.
Yun expects existing-home sales to gradually rise over the balance of the year, with conditions varying around the country. “It appears home sales are on a sounder footing and inventory is gradually being absorbed.”
Read more: http://rismedia.com/2009-08-04/pending-home-sales-up-for-fifth-consecutive-month/#ixzz0NJfNWWIR
Wednesday, July 15, 2009
Buy my house. (Do you have cash?)
This article from the Florida Assocition of Realtors pertains to this neighborhood and is well worth passing on.
The good news, however, is we have had 4 months of increasd sales. We have invoked the "first rule of holes". When you're in one, stop digging. I'm not saying we are in a recovered market, but at least we may have hit bottom.
Upscale home sales lag as jumbo loans are hard to get.
WASHINGTON – July 15, 2009 – More than four months after the Obama administration launched its housing rescue plan, scores of lenders are focused on rewriting mortgage loans to make them more affordable.
But one demographic is being largely ignored: homeowners with higher-price loans.They don’t qualify for mortgage modifications under the Obama plan. They can’t get today’s low interest rates if they try to refinance. And with newly cautious lenders warier about who they lend to, just try to sell a home that costs $730,000 or more these days. In many cases, finding a buyer who can get financing takes far longer than for lower-price homes, because banks want as much as 30 percent down and six months of mortgage payments in reserve.
The result is a housing market in which sales and purchases of higher-price homes have come almost to a standstill, and it’s a predicament that could undermine the housing recovery. Move-up buyers (homeowners who want to buy larger, pricier homes) are getting locked out by lack of financing. Too many unsold homes in the top tier of the market also can push down prices for homes in the midprice range.“We need to have a market recovery in all segments,” says Lawrence Yun, chief economist with the National Association of Realtors (NAR). “If the high-end market weakens, those in the middle have to reduce prices.”While the number of homeowners with higher loans is small relative to the entire market, Yun says, “All of Middle America is undoubtedly impacted.”
Jumbos and super-jumbos Bigger loans, known as jumbo loans, come in three types.
Loans up to $417,000 are considered “conforming,” and can be sold to mortgage-finance giants Fannie Mae and Freddie Mac, which also guarantee them when they resell those mortgages to investors. But after that, the situation is more complex.
Loans between $417,000 and $729,750 are “conforming jumbo,” and loans above $729,750 are “super-jumbo.” Fannie and Freddie back only conforming jumbos, and what qualifies as conforming can vary depending on location. In San Francisco, Fannie and Freddie will back loans up to $729,750. In Atlantic City, the maximum is $453,750.
Lenders are leery of making loans above the amount that Freddie and Fannie will guarantee, because if a jumbo loan borrower defaults, it’s harder for a bank to quickly sell a higher-end foreclosed property. And because Freddie and Fannie don’t buy non-conforming jumbo loans, there’s less of a secondary market for super-size loans.
States with the highest percentages of jumbo mortgages include Hawaii, California and New York, as well as the District of Columbia. In New Jersey, Maryland, Massachusetts, Virginia, Connecticut, Washington, Nevada and Florida, jumbos account for 10 percent or more of all loans.
Jumbo loans aren’t just for the very rich: In some pricey areas, $500,000 may buy only a modest single-family house or condo.
Sales of higher-price homes have slowed to a glacial pace, driving the supply of homes for sale above $750,000 from 18.7 months in 2007 to 41.1 months in 2009, according to NAR.With home values still falling in many areas, borrowers who took out jumbos a few years ago are finding they can’t refinance, and their mortgages are sliding into default. The number of jumbos 90 or more days delinquent reached 4.83 percent in March 2009, up from 1.68 percent in March 2008, says First American CoreLogic.
That trend is helping spread the foreclosure crisis from real-estate-bubble markets, such as California and Florida, where the housing crisis started, to other areas. Data from First American CoreLogic show that delinquency rates on jumbo mortgages under $1 million have more than doubled in areas such as Atlanta, St. Louis and Portland, Ore.
Some cities with high percentages of jumbo loans that are 90 or more days delinquent include Merced, Calif., Muncie, Ind., and Las Vegas-Paradise, Nev.
It’s been a costly situation for Victor Montalvo-Lugo, a clinical program manager at MedImmune in Gaithersburg, Md. He and his wife, Janette, bought a $1.6 million home in Thousand Oaks, Calif., in late 2005. He moved to Maryland for the MedImmune post in December, contracting for an $800,000 home to be built by late August. But with the California house on the market for weeks, he’s had no luck selling, even asking $1.05 million.If he can’t sell that home before a company buy-out option expires, Montalvo-Lugo worries about the financing on the new one. A similar but smaller home down the block from his in California is listed in the $900,000s, forcing him to lower his initial asking price. “I’m very concerned. We are already listing for less than what we owe,” Montalvo-Lugo says. “We lost all of the initial equity, and we owe the bank more than we will get.”
Pressure on prices . Those with jumbo loans who lose a job or have an adjustable-rate mortgage that resets to a higher amount are struggling. But help is scarce: Under the Obama housing rescue plan, homeowners with loans above $729,750 aren’t eligible for mortgage modifications. Lenders may make such modifications on an individual basis, however.
Many homeowners in higher-end markets are finding they must drastically lower prices to try to get buyers. From July 1, 2008, to July 1, 2009, nearly 26 percent of homes on the market for more than $1 million have seen price reductions, and the average reduction is 13 percent off the asking price, according to real estate information provider Trulia. Homes on the market for less than $1 million have seen an average reduction of 9 percent off the asking price.
“What you’re seeing are those properties sitting on the market for a lot longer because people can’t get loans,” says David Kerr, a ZipRealty agent in the San Francisco area. “I got a call about a property in Berkeley for more than $1 million and almost fell out of my chair. All of what we’re showing is in the $200,000 to $300,000 price range.”Jumbos are still being offered at Investors Savings Bank in Short Hills, N.J. But demand has slacked off because those taking out or refinancing jumbo loans must pay higher interest rates than other borrowers, says Richard Spengler, chief lending officer. Rates on jumbos are hovering around 6 percent, vs. 5.20 percent on a 30-year, fixed conventional loan.
The bank requires down payments of 20 percent to 30 percent, depending on the size of the jumbo. Spengler says many banks have gotten out of jumbo lending because of the lack of a secondary market. Investor Savings Bank keeps jumbos it issues in its own portfolio.
The overall stagnation in the market has a spillover effect on the economy. NAR estimates the slump in the jumbo home loan market has led to a $42 billion decline in economic activity.That’s because borrowers who take out jumbos have much higher incomes than a typical borrower (an average $207,600 in 2007, says NAR’s most recent data) and when they buy a home, they spend a lot to furnish it. When sales of costly homes slow, sellers of furniture, carpeting, flooring and appliances get hurt.
Z Gallerie, a home merchandise retailer, is the latest in a string of higher-end stores to feel pinched. The store filed for bankruptcy-court protection from creditors in April, citing a severe sales drop. January sales were down 19 percent from a year earlier.“The high-end retailers are being impacted,” says Gary Drenik at BIGresearch, a consumer intelligence firm. “When people buy a home, home-improvement and related sales go up.”Those who can buy higher-end homes are seeing their discretionary income further whacked by strict lending conditions. Lenders are requiring some borrowers seeking to finance 80 percent of their home purchase keep 40 percent of the total loan value in a reserve account, says Michael Tooker, a mortgage planning specialist for Valley Private Mortgage Group in Scottsdale, Ariz. On a $1 million loan, “that’s $400,000 in reserve,” he says. “Some want six months total debt service in reserve. It’s so arbitrary.”
Camille Swanson, a Realtor at Realty Executives in Phoenix, can relate to the struggle. After selling her home, she fell in love with a foreclosed stacked-stone home in the desert that had been abandoned. But she discovered that no lender wanted to give her a jumbo loan on a property that needed so much renovation.
Swanson is almost finished obtaining a loan for the new place with an approval up to $640,000, but details are still being negotiated. With her 20 percent downpayment, the total investment will be $800,000. She approached five lenders as far as Washington before finding one in her area to give her a loan. She didn’t need money in reserve because of her retirement assets. “For them, it’s an issue of risk,” Swanson says.
Raising the roof. Real estate groups such as the NAR are pressuring Congress and the Obama administration to increase the jumbo loan limits that Fannie and Freddie will guarantee and make them permanent. Current amounts were raised in 2008 and are set to expire Dec. 31. They also want the Federal Reserve to buy jumbo-backed securities because Freddie and Fannie can’t. The hope is that Fed purchases would create enough of a secondary market for these loans so banks would be more open to lending higher amounts.
Meanwhile, in jumbo-heavy markets, homeowners are increasingly frustrated by their inability to sell. They can’t relocate for jobs or retirement. They can’t unload vacation homes that they may now struggle to afford.
One such homeowner is Robert Westover, who works for the federal government in Washington, D.C. He’s been trying for months to sell a home in Hawaii with an ocean view. He bought it for $585,000 six years ago; it was valued at $1.1 million during the real estate peak in 2006. But there are no offers. He planned to list it for $940,000, but his Realtor suggested $890,000. Then he lowered it to $850,000. At one point, a potential buyer came forward but had no financing.
“It’s just been tough. It was getting crazy,” says Westover, 45, who now is taking the home off the market and renting it instead. “I hope I’ve learned a lesson, which is don’t put anything on the market in this economy. Most people who have homes in the jumbo (price range) are reliable, pay bills. Why are we suffering while the government gives help to everyone else?”
Copyright © 2009 USA TODAY, a division of Gannett Co. Inc., Stephanie Armour.
The good news, however, is we have had 4 months of increasd sales. We have invoked the "first rule of holes". When you're in one, stop digging. I'm not saying we are in a recovered market, but at least we may have hit bottom.
Upscale home sales lag as jumbo loans are hard to get.
WASHINGTON – July 15, 2009 – More than four months after the Obama administration launched its housing rescue plan, scores of lenders are focused on rewriting mortgage loans to make them more affordable.
But one demographic is being largely ignored: homeowners with higher-price loans.They don’t qualify for mortgage modifications under the Obama plan. They can’t get today’s low interest rates if they try to refinance. And with newly cautious lenders warier about who they lend to, just try to sell a home that costs $730,000 or more these days. In many cases, finding a buyer who can get financing takes far longer than for lower-price homes, because banks want as much as 30 percent down and six months of mortgage payments in reserve.
The result is a housing market in which sales and purchases of higher-price homes have come almost to a standstill, and it’s a predicament that could undermine the housing recovery. Move-up buyers (homeowners who want to buy larger, pricier homes) are getting locked out by lack of financing. Too many unsold homes in the top tier of the market also can push down prices for homes in the midprice range.“We need to have a market recovery in all segments,” says Lawrence Yun, chief economist with the National Association of Realtors (NAR). “If the high-end market weakens, those in the middle have to reduce prices.”While the number of homeowners with higher loans is small relative to the entire market, Yun says, “All of Middle America is undoubtedly impacted.”
Jumbos and super-jumbos Bigger loans, known as jumbo loans, come in three types.
Loans up to $417,000 are considered “conforming,” and can be sold to mortgage-finance giants Fannie Mae and Freddie Mac, which also guarantee them when they resell those mortgages to investors. But after that, the situation is more complex.
Loans between $417,000 and $729,750 are “conforming jumbo,” and loans above $729,750 are “super-jumbo.” Fannie and Freddie back only conforming jumbos, and what qualifies as conforming can vary depending on location. In San Francisco, Fannie and Freddie will back loans up to $729,750. In Atlantic City, the maximum is $453,750.
Lenders are leery of making loans above the amount that Freddie and Fannie will guarantee, because if a jumbo loan borrower defaults, it’s harder for a bank to quickly sell a higher-end foreclosed property. And because Freddie and Fannie don’t buy non-conforming jumbo loans, there’s less of a secondary market for super-size loans.
States with the highest percentages of jumbo mortgages include Hawaii, California and New York, as well as the District of Columbia. In New Jersey, Maryland, Massachusetts, Virginia, Connecticut, Washington, Nevada and Florida, jumbos account for 10 percent or more of all loans.
Jumbo loans aren’t just for the very rich: In some pricey areas, $500,000 may buy only a modest single-family house or condo.
Sales of higher-price homes have slowed to a glacial pace, driving the supply of homes for sale above $750,000 from 18.7 months in 2007 to 41.1 months in 2009, according to NAR.With home values still falling in many areas, borrowers who took out jumbos a few years ago are finding they can’t refinance, and their mortgages are sliding into default. The number of jumbos 90 or more days delinquent reached 4.83 percent in March 2009, up from 1.68 percent in March 2008, says First American CoreLogic.
That trend is helping spread the foreclosure crisis from real-estate-bubble markets, such as California and Florida, where the housing crisis started, to other areas. Data from First American CoreLogic show that delinquency rates on jumbo mortgages under $1 million have more than doubled in areas such as Atlanta, St. Louis and Portland, Ore.
Some cities with high percentages of jumbo loans that are 90 or more days delinquent include Merced, Calif., Muncie, Ind., and Las Vegas-Paradise, Nev.
It’s been a costly situation for Victor Montalvo-Lugo, a clinical program manager at MedImmune in Gaithersburg, Md. He and his wife, Janette, bought a $1.6 million home in Thousand Oaks, Calif., in late 2005. He moved to Maryland for the MedImmune post in December, contracting for an $800,000 home to be built by late August. But with the California house on the market for weeks, he’s had no luck selling, even asking $1.05 million.If he can’t sell that home before a company buy-out option expires, Montalvo-Lugo worries about the financing on the new one. A similar but smaller home down the block from his in California is listed in the $900,000s, forcing him to lower his initial asking price. “I’m very concerned. We are already listing for less than what we owe,” Montalvo-Lugo says. “We lost all of the initial equity, and we owe the bank more than we will get.”
Pressure on prices . Those with jumbo loans who lose a job or have an adjustable-rate mortgage that resets to a higher amount are struggling. But help is scarce: Under the Obama housing rescue plan, homeowners with loans above $729,750 aren’t eligible for mortgage modifications. Lenders may make such modifications on an individual basis, however.
Many homeowners in higher-end markets are finding they must drastically lower prices to try to get buyers. From July 1, 2008, to July 1, 2009, nearly 26 percent of homes on the market for more than $1 million have seen price reductions, and the average reduction is 13 percent off the asking price, according to real estate information provider Trulia. Homes on the market for less than $1 million have seen an average reduction of 9 percent off the asking price.
“What you’re seeing are those properties sitting on the market for a lot longer because people can’t get loans,” says David Kerr, a ZipRealty agent in the San Francisco area. “I got a call about a property in Berkeley for more than $1 million and almost fell out of my chair. All of what we’re showing is in the $200,000 to $300,000 price range.”Jumbos are still being offered at Investors Savings Bank in Short Hills, N.J. But demand has slacked off because those taking out or refinancing jumbo loans must pay higher interest rates than other borrowers, says Richard Spengler, chief lending officer. Rates on jumbos are hovering around 6 percent, vs. 5.20 percent on a 30-year, fixed conventional loan.
The bank requires down payments of 20 percent to 30 percent, depending on the size of the jumbo. Spengler says many banks have gotten out of jumbo lending because of the lack of a secondary market. Investor Savings Bank keeps jumbos it issues in its own portfolio.
The overall stagnation in the market has a spillover effect on the economy. NAR estimates the slump in the jumbo home loan market has led to a $42 billion decline in economic activity.That’s because borrowers who take out jumbos have much higher incomes than a typical borrower (an average $207,600 in 2007, says NAR’s most recent data) and when they buy a home, they spend a lot to furnish it. When sales of costly homes slow, sellers of furniture, carpeting, flooring and appliances get hurt.
Z Gallerie, a home merchandise retailer, is the latest in a string of higher-end stores to feel pinched. The store filed for bankruptcy-court protection from creditors in April, citing a severe sales drop. January sales were down 19 percent from a year earlier.“The high-end retailers are being impacted,” says Gary Drenik at BIGresearch, a consumer intelligence firm. “When people buy a home, home-improvement and related sales go up.”Those who can buy higher-end homes are seeing their discretionary income further whacked by strict lending conditions. Lenders are requiring some borrowers seeking to finance 80 percent of their home purchase keep 40 percent of the total loan value in a reserve account, says Michael Tooker, a mortgage planning specialist for Valley Private Mortgage Group in Scottsdale, Ariz. On a $1 million loan, “that’s $400,000 in reserve,” he says. “Some want six months total debt service in reserve. It’s so arbitrary.”
Camille Swanson, a Realtor at Realty Executives in Phoenix, can relate to the struggle. After selling her home, she fell in love with a foreclosed stacked-stone home in the desert that had been abandoned. But she discovered that no lender wanted to give her a jumbo loan on a property that needed so much renovation.
Swanson is almost finished obtaining a loan for the new place with an approval up to $640,000, but details are still being negotiated. With her 20 percent downpayment, the total investment will be $800,000. She approached five lenders as far as Washington before finding one in her area to give her a loan. She didn’t need money in reserve because of her retirement assets. “For them, it’s an issue of risk,” Swanson says.
Raising the roof. Real estate groups such as the NAR are pressuring Congress and the Obama administration to increase the jumbo loan limits that Fannie and Freddie will guarantee and make them permanent. Current amounts were raised in 2008 and are set to expire Dec. 31. They also want the Federal Reserve to buy jumbo-backed securities because Freddie and Fannie can’t. The hope is that Fed purchases would create enough of a secondary market for these loans so banks would be more open to lending higher amounts.
Meanwhile, in jumbo-heavy markets, homeowners are increasingly frustrated by their inability to sell. They can’t relocate for jobs or retirement. They can’t unload vacation homes that they may now struggle to afford.
One such homeowner is Robert Westover, who works for the federal government in Washington, D.C. He’s been trying for months to sell a home in Hawaii with an ocean view. He bought it for $585,000 six years ago; it was valued at $1.1 million during the real estate peak in 2006. But there are no offers. He planned to list it for $940,000, but his Realtor suggested $890,000. Then he lowered it to $850,000. At one point, a potential buyer came forward but had no financing.
“It’s just been tough. It was getting crazy,” says Westover, 45, who now is taking the home off the market and renting it instead. “I hope I’ve learned a lesson, which is don’t put anything on the market in this economy. Most people who have homes in the jumbo (price range) are reliable, pay bills. Why are we suffering while the government gives help to everyone else?”
Copyright © 2009 USA TODAY, a division of Gannett Co. Inc., Stephanie Armour.
Tuesday, June 9, 2009
Because You Asked.
The following is an article from RisMedia that I'd like to pass along.
$27.4 Billion Slashed Off Homes Currently for Sale Across America
RISMEDIA, June 9, 2009-Trulia, Inc., known for being one of the best places to start your real estate search, announced that 23.6% of current homes on the market in the United States have experienced at least one price cut, totaling $27.4 billion in reductions. The average price-reduced home has seen a listing price reduction of 10.6%.
Major metropolitan areas continue to be hit hard by price reductions. Of the top 50 cities in the U.S. based on population, 33 have seen 25% or more of home listings reduced in price, higher than the national average of 23.6%. U.S. cities that have seen at least 30% of homes reduced in price include:
• Jacksonville, Florida - 36%
•Tucson, Arizona - 32%
•Boston, Massachusetts - 32%
•Los Angeles, California - 32%
•Columbus, Ohio - 31%
•Dallas, Texas - 31%
•Honolulu, Hawaii - 31%
• Minneapolis, Minnesota - 31%
• Austin, Texas - 30%
• Washington, DC - 30%
• Baltimore, Maryland - 30%
• Las Vegas, Nevada - 30%
“Summer time is the peak season for buying and selling, and with some of the lowest prices in the last decade, we expect to it be a busy season,” said Pete Flint, Trulia co-founder and CEO. “Everyone wants to think they are getting the best deal available and price reductions are helping to spark a renewed interest in the U.S. real estate market.”
The Foreclosure Effect
The national average for price reductions on current home listings is 10.6%, but sellers in the areas hardest hit by foreclosures are slashing prices the most. Detroit home owners on average reduce their homes by 23%, while Las Vegas sellers reduce their homes by 16% and Miami sellers reduce their homes by 15%. Phoenix and Mesa are also experiencing deep price reductions with 13% slashed off the original listing price.
Luxury Market Getting Hit Hard
24% of homes with a selling price greater than $2 million are seeing price reductions compared to 23.6% of homes on the market for the less than $2 million. While the percentage of homes seeing discounts are almost identical, discounts on luxury homes are significantly more with 14.3% being slashed off the original listing price compared to only 9.7% of homes under the $2 million dollar price tag.
Trulia Price Reductions
According to the company, Trulia is one of the first national real estate sites to provide consumers with the ability to use price reductions as a search filter in their quest to find a deal in today’s market. Trulia’s Price Reduction feature can be accessed from the Trulia homepage and is deeply integrated into the existing search experience on the search results page and via the advanced search tab. Detailed information regarding multiple price reductions and prior sold data is now available on each property listing page.
Providing home buyers with access to price reduction data will help them be better informed as they decide which home to purchase and will help ensure consumers get the most home for their dollar. It will also help home sellers price their homes competitively as more homes come onto the market.
Charts are available for download at: http://www.trulia.com/info/june09pricereductions.
Methodology: All price change data is from live listings on Trulia.com, as of June 1, 2009 and tracks all price reductions from June 1, 2008 to June 1, 2009. This data does not include foreclosure properties. Trulia obtains its listing information from brokers, agents, third party aggregators and MLSs. The percentage of listings with price reductions includes any non-foreclosure property on Trulia.com that has experienced at least one price reduction since it was first posted on the site. The city level data is for listings within the city boundary, and not for metro areas.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
$27.4 Billion Slashed Off Homes Currently for Sale Across America
RISMEDIA, June 9, 2009-Trulia, Inc., known for being one of the best places to start your real estate search, announced that 23.6% of current homes on the market in the United States have experienced at least one price cut, totaling $27.4 billion in reductions. The average price-reduced home has seen a listing price reduction of 10.6%.
Major metropolitan areas continue to be hit hard by price reductions. Of the top 50 cities in the U.S. based on population, 33 have seen 25% or more of home listings reduced in price, higher than the national average of 23.6%. U.S. cities that have seen at least 30% of homes reduced in price include:
• Jacksonville, Florida - 36%
•Tucson, Arizona - 32%
•Boston, Massachusetts - 32%
•Los Angeles, California - 32%
•Columbus, Ohio - 31%
•Dallas, Texas - 31%
•Honolulu, Hawaii - 31%
• Minneapolis, Minnesota - 31%
• Austin, Texas - 30%
• Washington, DC - 30%
• Baltimore, Maryland - 30%
• Las Vegas, Nevada - 30%
“Summer time is the peak season for buying and selling, and with some of the lowest prices in the last decade, we expect to it be a busy season,” said Pete Flint, Trulia co-founder and CEO. “Everyone wants to think they are getting the best deal available and price reductions are helping to spark a renewed interest in the U.S. real estate market.”
The Foreclosure Effect
The national average for price reductions on current home listings is 10.6%, but sellers in the areas hardest hit by foreclosures are slashing prices the most. Detroit home owners on average reduce their homes by 23%, while Las Vegas sellers reduce their homes by 16% and Miami sellers reduce their homes by 15%. Phoenix and Mesa are also experiencing deep price reductions with 13% slashed off the original listing price.
Luxury Market Getting Hit Hard
24% of homes with a selling price greater than $2 million are seeing price reductions compared to 23.6% of homes on the market for the less than $2 million. While the percentage of homes seeing discounts are almost identical, discounts on luxury homes are significantly more with 14.3% being slashed off the original listing price compared to only 9.7% of homes under the $2 million dollar price tag.
Trulia Price Reductions
According to the company, Trulia is one of the first national real estate sites to provide consumers with the ability to use price reductions as a search filter in their quest to find a deal in today’s market. Trulia’s Price Reduction feature can be accessed from the Trulia homepage and is deeply integrated into the existing search experience on the search results page and via the advanced search tab. Detailed information regarding multiple price reductions and prior sold data is now available on each property listing page.
Providing home buyers with access to price reduction data will help them be better informed as they decide which home to purchase and will help ensure consumers get the most home for their dollar. It will also help home sellers price their homes competitively as more homes come onto the market.
Charts are available for download at: http://www.trulia.com/info/june09pricereductions.
Methodology: All price change data is from live listings on Trulia.com, as of June 1, 2009 and tracks all price reductions from June 1, 2008 to June 1, 2009. This data does not include foreclosure properties. Trulia obtains its listing information from brokers, agents, third party aggregators and MLSs. The percentage of listings with price reductions includes any non-foreclosure property on Trulia.com that has experienced at least one price reduction since it was first posted on the site. The city level data is for listings within the city boundary, and not for metro areas.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Tuesday, May 26, 2009
The following is a reprint from RisMedia Which I thought mightbe of value to many of you. It seems as if I get asked these questions very often.
RISMEDIA, May 25, 2009-(MCT)-Fewer homeowners may be starting complete kitchen remodels, but they’re still replacing countertops and re-facing cabinets. They’re also investing in improvements to make their homes more energy-efficient, according to a recent home remodeling and repair report by ServiceMagic.com. Others are splurging on hot tubs and home theaters after realizing that they may be in their homes for some years to come-and want to make them as comfortable as possible.
“People are not going bigger and better, but improving what they have more cost effectively,” said Craig Smith, CEO of ServiceMagic, a website that connects homeowners to prescreened contractors. For instance, instead of buying new furniture, they’re repairing what they have. Or they’re deep cleaning the carpet in lieu of replacing it.
All for good reason: Money is tight, lending standards strict and in a sluggish housing market you might not recoup as much of your remodeling investment at resale.
Home improvement spending is expected to decline 12% in 2009, according to Harvard University’s Joint Center for Housing Studies. Lower financing costs may be starting to stabilize the downturn in existing home sales, but “they have not been enough to offset rising unemployment and falling consumer confidence and encourage homeowners to undertake major home improvement projects,” said Kermit Baker, director of the Remodeling Futures Program at the Joint Center.
It’s much different than the days when home-equity lending was plentiful. Before doing anything, homeowners are carefully considering how they should spend their money.
In the days of easy credit, “there was a feeling of ‘we can’t go wrong, let’s just get started,’” said Bill Judson, an architect with HartmanBaldwin Design/Build, based in Claremont, Calif. “Now, it’s harder to get money, in terms of credit, and homeowners are taking it a little slower and educating themselves a little more.”
Meanwhile, those who do upgrade may be in for a bargain: Costs of materials, including lumber and copper, have dropped somewhat, Judson said. The biggest price cut has been related to lower labor costs as surviving contractors struggle to compete, he added.
The kitchen and bathroom are traditionally rooms where remodeling pays off. Some homeowners are still going through with full remodels these days, said Kimberly Sweet, editor of Kitchens.com. But they aren’t the norm. “A lot of people are making do with what they have, or maybe choosing to spruce up a few things and not do a full remodel,” Sweet said.
Nationally, the volume of countertop project requests rose 39% in the first quarter of 2009, compared with the first quarter of 2008, while major kitchen remodels are down 19%, according to ServiceMagic’s most recent Home Remodeling and Repair Index/Survey. The data comes from the company’s service requests; the site received 4.2 million requests from homeowners in 2008. Service requests for bathroom remodels were down 10% in the first quarter of this year, according to the report.
At the recent Kitchen/Bath Industry Show, affordable remodeling products included liquid stainless steel to refinish appliances and do-it-yourself backsplashes, Sweet said. Re-facing or painting cabinets and updating cabinet hardware have always been an option to remodel on a budget. For replacements, there are improved cabinet options in thermofoil, she said.
Consumers still gravitate toward granite countertops, but other less expensive-yet still attractive-countertop materials are available, Sweet added. For those considering resale values, it might be best to go for minor fix-ups. “Doing all the high end may not get you the return you were looking for before,” Sweet continued. “You don’t want to be the most expensive house on the block in this market.”
According to Remodeling Magazine’s 2008-2009 Cost vs. Value report, replacement projects that improve curb appeal-including siding, windows and decks-are some of your best bets for recouping money at resale.
Upgrading windows can make a home more energy-efficient. ServiceMagic has seen more interest in projects including insulation and solar-panel installation, which cut energy bills and are likely eligible for government tax credits, according to the company’s report.
And some homeowners are investing in home energy audits, for a comprehensive view of what can be done to increase efficiency, said Smith. The cost: Between $300 and $500. “But people will pay that because the insight provided can save them a lot of money down the road.” An audit can help homeowners prioritize projects.
Most home improvement projects may be practical these days, but some splurges are also becoming popular as market conditions force people to stay in a home longer than previously planned and as the economy has them spending more time entertaining at home. As a result, some homeowners are buying hot tubs, spas and saunas, as well as TVs and other home theater components, Smith said.
Compared to large-scale remodeling projects, “hot tubs are not a massive out-of-pocket expense,” Smith said. And “with the prices of flat-screen TVs coming down and the whole ’staycation’ phenomenon,” updated media rooms also have appeal, he added.
(c) 2009, MarketWatch.com Inc.Distributed by McClatchy-Tribune Information Services.Read more: "Rethinking Remodeling: Homeowners Want More Bang for Their Home-Improvement Buck RISMedia" - http://rismedia.com/2009-05-24/rethinking-remodeling-homeowners-want-more-bang-for-their-home-improvement-buck/#ixzz0GdDgpcQV&A
RISMEDIA, May 25, 2009-(MCT)-Fewer homeowners may be starting complete kitchen remodels, but they’re still replacing countertops and re-facing cabinets. They’re also investing in improvements to make their homes more energy-efficient, according to a recent home remodeling and repair report by ServiceMagic.com. Others are splurging on hot tubs and home theaters after realizing that they may be in their homes for some years to come-and want to make them as comfortable as possible.
“People are not going bigger and better, but improving what they have more cost effectively,” said Craig Smith, CEO of ServiceMagic, a website that connects homeowners to prescreened contractors. For instance, instead of buying new furniture, they’re repairing what they have. Or they’re deep cleaning the carpet in lieu of replacing it.
All for good reason: Money is tight, lending standards strict and in a sluggish housing market you might not recoup as much of your remodeling investment at resale.
Home improvement spending is expected to decline 12% in 2009, according to Harvard University’s Joint Center for Housing Studies. Lower financing costs may be starting to stabilize the downturn in existing home sales, but “they have not been enough to offset rising unemployment and falling consumer confidence and encourage homeowners to undertake major home improvement projects,” said Kermit Baker, director of the Remodeling Futures Program at the Joint Center.
It’s much different than the days when home-equity lending was plentiful. Before doing anything, homeowners are carefully considering how they should spend their money.
In the days of easy credit, “there was a feeling of ‘we can’t go wrong, let’s just get started,’” said Bill Judson, an architect with HartmanBaldwin Design/Build, based in Claremont, Calif. “Now, it’s harder to get money, in terms of credit, and homeowners are taking it a little slower and educating themselves a little more.”
Meanwhile, those who do upgrade may be in for a bargain: Costs of materials, including lumber and copper, have dropped somewhat, Judson said. The biggest price cut has been related to lower labor costs as surviving contractors struggle to compete, he added.
The kitchen and bathroom are traditionally rooms where remodeling pays off. Some homeowners are still going through with full remodels these days, said Kimberly Sweet, editor of Kitchens.com. But they aren’t the norm. “A lot of people are making do with what they have, or maybe choosing to spruce up a few things and not do a full remodel,” Sweet said.
Nationally, the volume of countertop project requests rose 39% in the first quarter of 2009, compared with the first quarter of 2008, while major kitchen remodels are down 19%, according to ServiceMagic’s most recent Home Remodeling and Repair Index/Survey. The data comes from the company’s service requests; the site received 4.2 million requests from homeowners in 2008. Service requests for bathroom remodels were down 10% in the first quarter of this year, according to the report.
At the recent Kitchen/Bath Industry Show, affordable remodeling products included liquid stainless steel to refinish appliances and do-it-yourself backsplashes, Sweet said. Re-facing or painting cabinets and updating cabinet hardware have always been an option to remodel on a budget. For replacements, there are improved cabinet options in thermofoil, she said.
Consumers still gravitate toward granite countertops, but other less expensive-yet still attractive-countertop materials are available, Sweet added. For those considering resale values, it might be best to go for minor fix-ups. “Doing all the high end may not get you the return you were looking for before,” Sweet continued. “You don’t want to be the most expensive house on the block in this market.”
According to Remodeling Magazine’s 2008-2009 Cost vs. Value report, replacement projects that improve curb appeal-including siding, windows and decks-are some of your best bets for recouping money at resale.
Upgrading windows can make a home more energy-efficient. ServiceMagic has seen more interest in projects including insulation and solar-panel installation, which cut energy bills and are likely eligible for government tax credits, according to the company’s report.
And some homeowners are investing in home energy audits, for a comprehensive view of what can be done to increase efficiency, said Smith. The cost: Between $300 and $500. “But people will pay that because the insight provided can save them a lot of money down the road.” An audit can help homeowners prioritize projects.
Most home improvement projects may be practical these days, but some splurges are also becoming popular as market conditions force people to stay in a home longer than previously planned and as the economy has them spending more time entertaining at home. As a result, some homeowners are buying hot tubs, spas and saunas, as well as TVs and other home theater components, Smith said.
Compared to large-scale remodeling projects, “hot tubs are not a massive out-of-pocket expense,” Smith said. And “with the prices of flat-screen TVs coming down and the whole ’staycation’ phenomenon,” updated media rooms also have appeal, he added.
(c) 2009, MarketWatch.com Inc.Distributed by McClatchy-Tribune Information Services.Read more: "Rethinking Remodeling: Homeowners Want More Bang for Their Home-Improvement Buck RISMedia" - http://rismedia.com/2009-05-24/rethinking-remodeling-homeowners-want-more-bang-for-their-home-improvement-buck/#ixzz0GdDgpcQV&A
Thursday, April 23, 2009
Are things looking up?
The following is a report from the National Association of Realtors.
ORLANDO, Fla. – April 23, 2009 – Florida’s existing home sales increased in March, making it the seventh month in a row that sales activity demonstrated gains in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). March’s statewide sales also increased over the previous month’s sales level in both the existing home and existing condo markets.
Existing home sales rose 30 percent last month with a total of 13,085 homes sold statewide compared to 10,080 homes sold in March 2008, according to FAR. Statewide existing home sales in March were 32.7 percent higher than February’s statewide sales.
Florida Realtors also reported a 25 percent rise in statewide sales of existing condominiums in March, continuing a trend in recent months for higher statewide sales of both the existing home and existing condo markets compared to year-ago levels. Statewide existing condo sales last month increased 37.2 percent over the total units sold in February.
Fifteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in March and 13 MSAs also showed gains in condo sales. It marks the ninth consecutive month that a majority of markets have reported increased sales.
Florida’s median sales price for existing homes last month was $141,300; a year ago, it was $201,700 for a 30 percent decrease. Industry analysts with the National Association of Realtors® (NAR) report there is a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less. The national median sales price for existing single-family homes in February 2009 was $164,600, down 15 percent from a year earlier, according to NAR. In California, the statewide median resales price was $247,590 in February; in Massachusetts, it was $252,500; in Maryland, it was $253,200; and in New York, it was $210,000.
NAR’s latest housing industry outlook reported that entry-level buyers are seeking bargains, which resulted in sales of distressed properties accounting for 40 to 45 percent of February’s transactions. “Given the downward distortion in price comparisons due to distressed sales, it’s important for owners to keep in mind that this doesn’t equate to a similar loss of value for traditional homes in good condition,” said NAR Chief Economist Lawrence Yun.
In Florida’s year-to-year comparison for condos, 4,388 units sold statewide compared to 3,503 units in March 2008 for a 25 percent increase. The statewide existing condo median sales price last month was $108,700; in March 2008 it was $172,300 for a 37 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $172,200 in February 2009.
Interest rates for a 30-year fixed-rate mortgage averaged 5 percent last month, down significantly from the average rate of 5.97 percent in March 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s large to medium-size markets, the Melbourne-Titusville-Palm Bay MSA reported a total of 539 homes sold in March compared to 445 homes a year ago for a 21 percent increase. The existing home median sales price was $123,700; a year ago, it was $159,000 for a 22 percent decrease. In the year-to-year comparison for the existing condo market, a total of 113 units sold in the MSA last month, up 24 percent compared to 91 condos sold the previous March. The market’s existing condo median price was $123,100; a year ago, it was $164,300 for a 25 percent decrease.2009 © FLORIDA ASSOCIATION OF REALTORS
ORLANDO, Fla. – April 23, 2009 – Florida’s existing home sales increased in March, making it the seventh month in a row that sales activity demonstrated gains in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). March’s statewide sales also increased over the previous month’s sales level in both the existing home and existing condo markets.
Existing home sales rose 30 percent last month with a total of 13,085 homes sold statewide compared to 10,080 homes sold in March 2008, according to FAR. Statewide existing home sales in March were 32.7 percent higher than February’s statewide sales.
Florida Realtors also reported a 25 percent rise in statewide sales of existing condominiums in March, continuing a trend in recent months for higher statewide sales of both the existing home and existing condo markets compared to year-ago levels. Statewide existing condo sales last month increased 37.2 percent over the total units sold in February.
Fifteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in March and 13 MSAs also showed gains in condo sales. It marks the ninth consecutive month that a majority of markets have reported increased sales.
Florida’s median sales price for existing homes last month was $141,300; a year ago, it was $201,700 for a 30 percent decrease. Industry analysts with the National Association of Realtors® (NAR) report there is a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less. The national median sales price for existing single-family homes in February 2009 was $164,600, down 15 percent from a year earlier, according to NAR. In California, the statewide median resales price was $247,590 in February; in Massachusetts, it was $252,500; in Maryland, it was $253,200; and in New York, it was $210,000.
NAR’s latest housing industry outlook reported that entry-level buyers are seeking bargains, which resulted in sales of distressed properties accounting for 40 to 45 percent of February’s transactions. “Given the downward distortion in price comparisons due to distressed sales, it’s important for owners to keep in mind that this doesn’t equate to a similar loss of value for traditional homes in good condition,” said NAR Chief Economist Lawrence Yun.
In Florida’s year-to-year comparison for condos, 4,388 units sold statewide compared to 3,503 units in March 2008 for a 25 percent increase. The statewide existing condo median sales price last month was $108,700; in March 2008 it was $172,300 for a 37 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $172,200 in February 2009.
Interest rates for a 30-year fixed-rate mortgage averaged 5 percent last month, down significantly from the average rate of 5.97 percent in March 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s large to medium-size markets, the Melbourne-Titusville-Palm Bay MSA reported a total of 539 homes sold in March compared to 445 homes a year ago for a 21 percent increase. The existing home median sales price was $123,700; a year ago, it was $159,000 for a 22 percent decrease. In the year-to-year comparison for the existing condo market, a total of 113 units sold in the MSA last month, up 24 percent compared to 91 condos sold the previous March. The market’s existing condo median price was $123,100; a year ago, it was $164,300 for a 25 percent decrease.2009 © FLORIDA ASSOCIATION OF REALTORS
Monday, April 20, 2009
If you haven't heard, the new word is GREEN!
This is an article from RisMedia who publish to the Real Estate Industry. I thought you may find it interesting. It's a panel discussion on green in the industry.
Oh, and by the way, the market is showing signs of turning. As thee inventory of foreclosures and short sales (which have been dragging values down) decreases (and it is) it provides a better opportunity for others who wish to sell. Pending sales have risen steadily over the past few weeks.
Now for the green part!
RISMEDIA, April 16, 2009-With Earth Day right around the corner and the concept of ‘going green’ becoming more mainstream for both companies and homeowners, now is the time to look at the ways in which you too can join the green movement. This month’s Power Broker Roundtable focuses on the green concept and how two industry leaders have taken on the challenge to go green.
Moderator Virginia Cook, Special Liaison for Large Firm Relations, NAR.
Participants-Richard (Dick) Fisher, President, Morro Bay Realty, Morro Bay, California
Sherry Chris, President and CEO, Better Homes and Gardens Real Estate.
Virginia Cook: Kermit the Frog said it years ago-”It’s not easy being green.” Though the context has changed, the quest to save our planet by living green has gained a new importance. More eco-friendly products are popping up in stores, and the trend toward a paperless lifestyle is more than politically correct. It is a real acceptance of our responsibility to hand a healthy planet to the generations that follow us. This is also the reason NAR has developed green resources for use by brokers and agents-including the new Green Designation .
(www.GreenREsourceCouncil.org), plus pertinent information at www.realtor.org/archives/green, and articles at REALTOR® Magazine Online.
For this month’s Roundtable, we’ve invited two industry leaders who accepted the challenge to go green early on. Dick, your office has been virtually paperless since 2006. How-and why-did that happen?
Dick Fisher: Well, I grew up with computers, so going paperless seemed like a natural step. With scanners in every office and a full-time transaction coordinator, everything we do today is electronic. Forms are scanned directly into e-mail. DocuSign lets customers sign forms online and e-mail them back to our office. Lenders, escrow companies, even home inspectors and pest control companies are doing more of their business electronically. Everything happens faster and at a lower cost-no postage, no paper, no waiting.
Sherry Chris: I’ll go along with that. A year ago, Realogy started going green with our corporate building in New Jersey. They eliminated disposable cartons and serveware from the cafeteria in favor of reusable materials. They shut down the energy hogs, replaced a circulating fountain with trees and put all the lights on timers. Now we’re launching a new campaign to take it to our offices and customers. There is now a “Living Green” section on our website and a host of resources for agents and brokers on our Intranet.
VC: But does going paperless mean we have to hire technically skilled people? And how is the emphasis on living green affecting agents?
DF: We still hire agents who are salespeople, first and foremost. Then we train them to operate in our paperless environment. Once they try it, they are sold. Even the older agents, who can still remember those bulky multiple listing books they used to carry around, have no problem adapting to the new environment. Often, they are the first to agree that this makes doing business much easier.
VC: Dick, you mentioned you have a full-time transaction coordinator on staff who keeps things moving electronically. Is that a strain on your bottom line?
DF: Just the opposite. In the old days, we had two staffers and an overseer to keep track of all that paperwork. Now, we have the one licensed transaction coordinator, so our cost is substantially less. Overall, in fact, when you factor in the savings in postage, paper, photocopying and mileage, I expect us to cut our costs in half.
SC: For me, going successfully green means combining education and action-and involving our brokers, agents and customers in this supremely important effort. We had great participation in Earth Hour last month, turning off lights for one hour in a show of solidarity-and we’re gearing up for even better participation on Earth Day on April 22.
The Power Broker Roundtable is brought to you by the National Association of REALTORS® and Virginia Cook, NAR’s Special Liaison for Large Firm Relations. Watch for this column each month, where we address broker issues, concerns and milestones.
RISMedia welcomes your questions and comments.
Oh, and by the way, the market is showing signs of turning. As thee inventory of foreclosures and short sales (which have been dragging values down) decreases (and it is) it provides a better opportunity for others who wish to sell. Pending sales have risen steadily over the past few weeks.
Now for the green part!
RISMEDIA, April 16, 2009-With Earth Day right around the corner and the concept of ‘going green’ becoming more mainstream for both companies and homeowners, now is the time to look at the ways in which you too can join the green movement. This month’s Power Broker Roundtable focuses on the green concept and how two industry leaders have taken on the challenge to go green.
Moderator Virginia Cook, Special Liaison for Large Firm Relations, NAR.
Participants-Richard (Dick) Fisher, President, Morro Bay Realty, Morro Bay, California
Sherry Chris, President and CEO, Better Homes and Gardens Real Estate.
Virginia Cook: Kermit the Frog said it years ago-”It’s not easy being green.” Though the context has changed, the quest to save our planet by living green has gained a new importance. More eco-friendly products are popping up in stores, and the trend toward a paperless lifestyle is more than politically correct. It is a real acceptance of our responsibility to hand a healthy planet to the generations that follow us. This is also the reason NAR has developed green resources for use by brokers and agents-including the new Green Designation .
(www.GreenREsourceCouncil.org), plus pertinent information at www.realtor.org/archives/green, and articles at REALTOR® Magazine Online.
For this month’s Roundtable, we’ve invited two industry leaders who accepted the challenge to go green early on. Dick, your office has been virtually paperless since 2006. How-and why-did that happen?
Dick Fisher: Well, I grew up with computers, so going paperless seemed like a natural step. With scanners in every office and a full-time transaction coordinator, everything we do today is electronic. Forms are scanned directly into e-mail. DocuSign lets customers sign forms online and e-mail them back to our office. Lenders, escrow companies, even home inspectors and pest control companies are doing more of their business electronically. Everything happens faster and at a lower cost-no postage, no paper, no waiting.
Sherry Chris: I’ll go along with that. A year ago, Realogy started going green with our corporate building in New Jersey. They eliminated disposable cartons and serveware from the cafeteria in favor of reusable materials. They shut down the energy hogs, replaced a circulating fountain with trees and put all the lights on timers. Now we’re launching a new campaign to take it to our offices and customers. There is now a “Living Green” section on our website and a host of resources for agents and brokers on our Intranet.
VC: But does going paperless mean we have to hire technically skilled people? And how is the emphasis on living green affecting agents?
DF: We still hire agents who are salespeople, first and foremost. Then we train them to operate in our paperless environment. Once they try it, they are sold. Even the older agents, who can still remember those bulky multiple listing books they used to carry around, have no problem adapting to the new environment. Often, they are the first to agree that this makes doing business much easier.
VC: Dick, you mentioned you have a full-time transaction coordinator on staff who keeps things moving electronically. Is that a strain on your bottom line?
DF: Just the opposite. In the old days, we had two staffers and an overseer to keep track of all that paperwork. Now, we have the one licensed transaction coordinator, so our cost is substantially less. Overall, in fact, when you factor in the savings in postage, paper, photocopying and mileage, I expect us to cut our costs in half.
SC: For me, going successfully green means combining education and action-and involving our brokers, agents and customers in this supremely important effort. We had great participation in Earth Hour last month, turning off lights for one hour in a show of solidarity-and we’re gearing up for even better participation on Earth Day on April 22.
The Power Broker Roundtable is brought to you by the National Association of REALTORS® and Virginia Cook, NAR’s Special Liaison for Large Firm Relations. Watch for this column each month, where we address broker issues, concerns and milestones.
RISMedia welcomes your questions and comments.
Wednesday, March 4, 2009
GOOD NEWS BAD NEWS
This is a reprint from RisMedia magazine that sums up the situation very pointedly. Your comments are welcome.
RISMEDIA, March 4, 2009-Pending home sales declined on the heels of a weakening economy and with some buyers waiting for clarity on housing stimulus provisions, the National Association of Realtors® announced this week.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, fell 7.7% to 80.4 from a downwardly revised reading of 87.1 in December, and is 6.4% below January 2008 when it was 85.9. The index is at the lowest level since tracking began in 2001, when the index value was set at 100.
Lawrence Yun, NAR chief economist, said the downturn in the economy also weighed heavily on the data. “Even with many serious potential home buyers on the sidelines waiting for passage of the stimulus bill, job losses and weak consumer confidence were a natural drag on home sales,” he said. “We expect similarly soft home sales in the near term, but buyers are expected to respond to much improved affordability conditions and from the $8,000 first-time buyer tax credit.”
The PHSI in the Northeast dropped 12.7% to 57.8 in January and is 19.7% below a year ago. In the Midwest the index declined 9.2% to 72.6 and is 13.8% below January 2008. The index in the South fell 11.9% to 82.2 in January and is 9.1% below a year ago. In the West the index rose 2.4% to 103.6 and is 13.5% higher than January 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said it’s ironic with the weak housing market that affordability conditions have improved dramatically. “Housing affordability is at a record high - the buying power of a typical family has risen significantly,” he said. “With the drop in interest rates, a median-income family can afford a home costing $20,000 more than a year ago for the same monthly mortgage payment. With the strong housing stimulus, we are hopeful inventory will get trimmed and help prices to stabilize in many areas by the end of this year.”
NAR’s Housing Affordability Index rose 13.6 percentage points in January to 166.8, a new record high.2 The HAI, a broad index of affordability using consistent values and assumptions over time, shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.
The HAI indicates a median-income family, earning $59,800, could afford a home costing $283,400 in January with a 20% downpayment, assuming 25% of gross income is devoted to mortgage principal and interest; affordability conditions for first-time buyers with the same income and small downpayments are roughly 80% of that amount. A year ago, the typical family could afford a home costing $263,300.
Yun added, “Conditions have been aligning very favorably for home buyers with the exception of consumer confidence. But I am hopeful that sales will turn around by late spring and early summer because history suggests that home sales can rise even in times of job losses when housing affordability rises.”
Existing-home sales for February will be released March 23; the next Pending Home Sales Index will be on April 1.
RISMEDIA, March 4, 2009-Pending home sales declined on the heels of a weakening economy and with some buyers waiting for clarity on housing stimulus provisions, the National Association of Realtors® announced this week.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, fell 7.7% to 80.4 from a downwardly revised reading of 87.1 in December, and is 6.4% below January 2008 when it was 85.9. The index is at the lowest level since tracking began in 2001, when the index value was set at 100.
Lawrence Yun, NAR chief economist, said the downturn in the economy also weighed heavily on the data. “Even with many serious potential home buyers on the sidelines waiting for passage of the stimulus bill, job losses and weak consumer confidence were a natural drag on home sales,” he said. “We expect similarly soft home sales in the near term, but buyers are expected to respond to much improved affordability conditions and from the $8,000 first-time buyer tax credit.”
The PHSI in the Northeast dropped 12.7% to 57.8 in January and is 19.7% below a year ago. In the Midwest the index declined 9.2% to 72.6 and is 13.8% below January 2008. The index in the South fell 11.9% to 82.2 in January and is 9.1% below a year ago. In the West the index rose 2.4% to 103.6 and is 13.5% higher than January 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said it’s ironic with the weak housing market that affordability conditions have improved dramatically. “Housing affordability is at a record high - the buying power of a typical family has risen significantly,” he said. “With the drop in interest rates, a median-income family can afford a home costing $20,000 more than a year ago for the same monthly mortgage payment. With the strong housing stimulus, we are hopeful inventory will get trimmed and help prices to stabilize in many areas by the end of this year.”
NAR’s Housing Affordability Index rose 13.6 percentage points in January to 166.8, a new record high.2 The HAI, a broad index of affordability using consistent values and assumptions over time, shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.
The HAI indicates a median-income family, earning $59,800, could afford a home costing $283,400 in January with a 20% downpayment, assuming 25% of gross income is devoted to mortgage principal and interest; affordability conditions for first-time buyers with the same income and small downpayments are roughly 80% of that amount. A year ago, the typical family could afford a home costing $263,300.
Yun added, “Conditions have been aligning very favorably for home buyers with the exception of consumer confidence. But I am hopeful that sales will turn around by late spring and early summer because history suggests that home sales can rise even in times of job losses when housing affordability rises.”
Existing-home sales for February will be released March 23; the next Pending Home Sales Index will be on April 1.
Monday, February 16, 2009
A Little Good Newws
In an effort to keep you abresat of what's happening in Real Estate, I have re-printed an article from the National Association of Realtors (NAR).
WASHINGTON – Feb. 16, 2009 – Now that the American Recovery and Reinvestment Act has been sent to President Obama for his signature, the National Association of Realtors® (NAR) looks forward to swift implementation.
“We are pleased that Congress and the administration have taken prompt action to address the current economic crisis,” says NAR President Charles McMillan. “Job creation and tax cuts are going to help families recover and prosper, and these initiatives will help more people keep their homes and help others become homeowners.”
The legislation contains two important housing provisions advocated by NAR. The final stimulus bill increases the first-time homebuyer tax credit to $8,000 and eliminates the repayment requirement of earlier legislation. In addition, the credit availability has been extended until Dec. 1, 2009.
“These important provisions will help bring first-time homebuyers to the market and reduce housing inventory,” says McMillan. NAR estimates that the homebuyer tax provisions could stimulate up to 300,000 additional home sales, helping stabilize home values and potentially preventing some homeowners from being “underwater” on their mortgage, which can often lead to foreclosure.
The bill also reinstates the 2008 higher loan limits for FHA, Fannie Mae and Freddie Mac. “These … make mortgages affordable regardless of where you live,” McMillan says. “ This will also help reduce inventory and improve liquidity in the overall mortgage market.”
NAR commended President Obama and Congress for including neighborhood stabilization efforts to help communities purchase and rehabilitate foreclosed and vacant properties. Realtors also praised the provision to help America’s wounded soldiers who need to move or relocate.
In addition to federal bailout measures, NAR’s also advocates better foreclosure mitigation efforts and lower interest rates for homeowners and buyers. NAR expects these components to be addressed in the coming days. © 2009 FLORIDA ASSOCIATION OF REALTORS®
WASHINGTON – Feb. 16, 2009 – Now that the American Recovery and Reinvestment Act has been sent to President Obama for his signature, the National Association of Realtors® (NAR) looks forward to swift implementation.
“We are pleased that Congress and the administration have taken prompt action to address the current economic crisis,” says NAR President Charles McMillan. “Job creation and tax cuts are going to help families recover and prosper, and these initiatives will help more people keep their homes and help others become homeowners.”
The legislation contains two important housing provisions advocated by NAR. The final stimulus bill increases the first-time homebuyer tax credit to $8,000 and eliminates the repayment requirement of earlier legislation. In addition, the credit availability has been extended until Dec. 1, 2009.
“These important provisions will help bring first-time homebuyers to the market and reduce housing inventory,” says McMillan. NAR estimates that the homebuyer tax provisions could stimulate up to 300,000 additional home sales, helping stabilize home values and potentially preventing some homeowners from being “underwater” on their mortgage, which can often lead to foreclosure.
The bill also reinstates the 2008 higher loan limits for FHA, Fannie Mae and Freddie Mac. “These … make mortgages affordable regardless of where you live,” McMillan says. “ This will also help reduce inventory and improve liquidity in the overall mortgage market.”
NAR commended President Obama and Congress for including neighborhood stabilization efforts to help communities purchase and rehabilitate foreclosed and vacant properties. Realtors also praised the provision to help America’s wounded soldiers who need to move or relocate.
In addition to federal bailout measures, NAR’s also advocates better foreclosure mitigation efforts and lower interest rates for homeowners and buyers. NAR expects these components to be addressed in the coming days. © 2009 FLORIDA ASSOCIATION OF REALTORS®
Tuesday, February 3, 2009
Better News
The following is reprinted from the Florida Association of Realtors. Our problems are not over, but we're moving in the right direction!
ORLANDO, Fla. – Jan. 26, 2009 – Florida’s existing home sales rose in December, making it the fourth consecutive month that sales activity demonstrated gains in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). December’s statewide sales also increased over November’s figures in both the existing home and existing condo markets.
Existing home sales rose 27 percent last month with a total of 11,053 homes sold statewide compared to 8,712 homes sold in December 2007, according to FAR. December’s statewide existing home sales were 28.9 percent higher than November’s statewide sales.
Florida Realtors also reported a 12 percent gain in statewide sales of existing condominiums in December, marking the third recent month (following September and October) for higher statewide existing home and existing condo sales compared to year-ago levels. Statewide existing condo sales last month increased 37.7 percent over the total units sold in November.
Sixteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in December; 11 MSAs also showed gains in condo sales, marking the sixth month in a row that a number of markets have reported increased sales activity.
Florida’s median sales price for existing homes last month was $155,500; a year ago, it was $213,600 for a 27 percent decrease. According to industry analysts with the National Association of Realtors® (NAR), there remains a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less. The national median sales price for existing single-family homes in November 2008 was $180,800, down 12.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $285,680 in November; in Massachusetts, it was $283,000; in Maryland, it was $262,109; and in New York, it was $210,000.
While overall sales have softened nationally in recent months, NAR’s latest housing outlook noted a trend of increasing activity in Florida, California, Arizona and Nevada markets. “Sales are rising in areas with large numbers of distressed properties as bargain hunters take advantage of discounted home prices,” said NAR Chief Economist Lawrence Yun. “It is imperative to provide incentives for homebuyers to get back into the market. It also depends on how effectively Congress and the new administration can help facilitate the short sales process and unclog the mortgage pipeline – impediments remain for some buyers with good credit.”
In Florida’s year-to-year comparison for condos, 3,138 units sold statewide compared to 2,814 sold in December 2007 for a 12 percent increase. The statewide existing condo median sales price last month was $130,600; in December 2007 it was $192,600 for a 32 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $185,400 in November 2008.
Last month, interest rates for a 30-year fixed-rate mortgage averaged 5.29 percent, significantly lower than the average rate of 6.10 percent in December 2007, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written. Among the state’s large to medium-size markets, the West Palm Beach-Boca Raton MSA reported a total of 638 homes sold in December compared to 467 homes a year ago for a 37 percent increase. The existing home median sales price was $246,000; a year ago, it was $337,900 for a 27 percent decrease. In the year-to-year comparison for the existing condo market, a total of 527 units sold in the MSA last month, up 26 percent compared to 419 condos sold the previous December. The market’s existing condo median price was $112,900; a year ago, it was $161,400 for a 30 percent decrease.
© 2009 FLORIDA ASSOCIATION OF REALTORS
ORLANDO, Fla. – Jan. 26, 2009 – Florida’s existing home sales rose in December, making it the fourth consecutive month that sales activity demonstrated gains in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). December’s statewide sales also increased over November’s figures in both the existing home and existing condo markets.
Existing home sales rose 27 percent last month with a total of 11,053 homes sold statewide compared to 8,712 homes sold in December 2007, according to FAR. December’s statewide existing home sales were 28.9 percent higher than November’s statewide sales.
Florida Realtors also reported a 12 percent gain in statewide sales of existing condominiums in December, marking the third recent month (following September and October) for higher statewide existing home and existing condo sales compared to year-ago levels. Statewide existing condo sales last month increased 37.7 percent over the total units sold in November.
Sixteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in December; 11 MSAs also showed gains in condo sales, marking the sixth month in a row that a number of markets have reported increased sales activity.
Florida’s median sales price for existing homes last month was $155,500; a year ago, it was $213,600 for a 27 percent decrease. According to industry analysts with the National Association of Realtors® (NAR), there remains a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less. The national median sales price for existing single-family homes in November 2008 was $180,800, down 12.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $285,680 in November; in Massachusetts, it was $283,000; in Maryland, it was $262,109; and in New York, it was $210,000.
While overall sales have softened nationally in recent months, NAR’s latest housing outlook noted a trend of increasing activity in Florida, California, Arizona and Nevada markets. “Sales are rising in areas with large numbers of distressed properties as bargain hunters take advantage of discounted home prices,” said NAR Chief Economist Lawrence Yun. “It is imperative to provide incentives for homebuyers to get back into the market. It also depends on how effectively Congress and the new administration can help facilitate the short sales process and unclog the mortgage pipeline – impediments remain for some buyers with good credit.”
In Florida’s year-to-year comparison for condos, 3,138 units sold statewide compared to 2,814 sold in December 2007 for a 12 percent increase. The statewide existing condo median sales price last month was $130,600; in December 2007 it was $192,600 for a 32 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $185,400 in November 2008.
Last month, interest rates for a 30-year fixed-rate mortgage averaged 5.29 percent, significantly lower than the average rate of 6.10 percent in December 2007, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written. Among the state’s large to medium-size markets, the West Palm Beach-Boca Raton MSA reported a total of 638 homes sold in December compared to 467 homes a year ago for a 37 percent increase. The existing home median sales price was $246,000; a year ago, it was $337,900 for a 27 percent decrease. In the year-to-year comparison for the existing condo market, a total of 527 units sold in the MSA last month, up 26 percent compared to 419 condos sold the previous December. The market’s existing condo median price was $112,900; a year ago, it was $161,400 for a 30 percent decrease.
© 2009 FLORIDA ASSOCIATION OF REALTORS
Monday, January 19, 2009
Where is the housing market?
This artical will answer some of your questions and shed important light on the Foreclosure and lending situation. The article was re-printed from the Miami Herald.
Few borrowers can revise loans, especially if debt exceeds home value.
MIAMI – Jan. 19, 2009 – Since defaulting on her mortgage more than a year ago, Marisela Gonzalez has attended foreclosure prevention seminars, spent hours on the phone with her lender, paid a consultant, availed herself of bankruptcy protection – everything in her power to hang on to her home.
“I thought to pack and just get out,” recalled the Miami-Dade special-education teacher. ‘Then, I said, ‘ No . . . this is my place. I’ve been here 15 years and I am not going to give it back to a bank just like that.’ “Yet Gonzalez is giving her Kendall townhome back to the bank, in this case the federal government, which took over lender IndyMac. Even with an offer to lower her interest rate, Gonzalez could not afford the payments and owes about $100,000 more than the house is worth.
Gonzalez’s attempts to stay in her home illustrate why regulators are having trouble stemming the flood of foreclosures at the heart of the nation’s economic crisis. And why some say it is imperative for the economy that a major chunk of the remaining $700 billion bailout bonanza go to helping homeowners drowning in debt.
Regulators, lawmakers and economists alike believe helping borrowers get into loans with more favorable terms – smaller loans, lower interest rates – is crucial to ending the recession. But despite the creation of a number of programs, only a small percentage of struggling homeowners have received help.
Lenders, watching out for their bottom lines, will go along only as long as helping the borrower will cost them less than foreclosing and reselling the home. Plus, they are skittish about staying on the hook with borrowers who are highly likely to default again.
Borrowers, for their part, often can’t afford the reduced payments. When they can, they question the sense of paying on a home that, in South Florida at least, is still falling in value. Investors, who represent a big slice of delinquent homeowners, do not qualify for a mortgage lifeline at all.
No one questions that the need is dire. Regulators from Federal Deposit Insurance Corp. Chairman Sheila Bair to Federal Reserve Chairman Ben Bernanke and the U.S. Treasury’s Neel Kashkari have repeatedly told Congress that more must be done to prevent foreclosures and stabilize falling home prices, saying both are required to lift the economy out of recession.
In November, the FDIC estimated that another 3.8 million mortgages would be 60 days to 90 days past due by the end of 2009.Yet, even the government’s own effort to modify loans, which is being held out as a national model for other lenders, has its flaws, housing advocates and other market observers said.
Of the 45,000 borrowers eligible for a workout under an FDIC program, 8,500 loans have been restructured. “Thousands more,” though, are in the pipeline, the FDIC said. The agency would not say how many borrowers could not be helped.
And Hope for Homeowners, passed by Congress in July, was expected to help 400,000 borrowers avoid foreclosure with Federal Housing Administration guarantees of up to $300 billion in refinanced loans.
So far, only 350 loans nationwide have been refinanced, according to the U.S. Department of Housing and Urban Development.Unpopular termsThe reason: Lenders have to agree to write the value of the loan down to 90 percent of the home’s current market value. Homeowners have to share half of any future equity with the federal government. Neither are eager to do that.The numbers disappoint Guy Cecala, publisher of Inside Mortgage Finance, who asserts that across-the-board, automatic modifications are needed to contain the wreckage of the last six years.
That might have been possible had bailout funds been used to buy mortgage-backed securities, putting control of the loans in the government’s hands rather than Wall Street investors, he said.“If this is the best model we’ve got, we’re still in trouble,” Cecala said. “It is probably the most aggressive we’ve seen out there and you are still not getting a lot of success.”It’s not clear what system will be used to implement a sweeping foreclosure-prevention program pledged by President-elect Barack Obama during negotiations with Congress over the release last week of $350 billion in bailout funds.
Loan modifications are different from repayment plans, which help borrowers catch up on missed payments by doing things like folding past-due amounts into the mortgage balance or boosting monthly payments by a small amount to pay arrears a bit at a time. Generally, they’re meant to see borrowers through a temporary rough patch.
Modifications take aim at the mortgage’s structure. Plans can include converting adjustable interest rates to fixed, lowering rates and, in rare cases, forgiving some of the principal. Banks often will extend the life of the loan to reduce monthly payments as well.Under intense public pressure, lenders have amped up loan modifications.
Hope Now, an alliance of nonprofits, lenders and the federal government, said more than 850,000 loans were modified through November.The FDIC says only 4 percent of seriously delinquent loans each month are being modified. And Office of the Comptroller of the Currency data suggest the modifications may ultimately not be much help. The OCC found recently that 37 percent of mortgages modified in the first quarter of 2008 were 60 days past due within six months.“Maybe the loan modification did not cut far enough; it may be that the loan was so poorly underwritten that nothing could help the borrower,” said Bryan Hubbard, an OCC spokesman. “It may be that borrower had more credit available and used it for other means and ran up debt elsewhere and the economy has taken a turn for the worse.”
Avi Shenkar, president of GMA Modification in North Miami Beach, said modifications still weren’t lowering payments enough for borrowers who took out teaser rate loans and owe far more then they could afford.He also questions how willing banks are to work with homeowners, since eight out of 10 seeking help from GMA already have been denied a modification from the bank.Jackie Duran, director of foreclosure prevention at the nonprofit Neighborhood Housing Services of South Florida, said many of their clients also got nowhere dealing with the bank.
“It’s obvious to us that lenders are not trying to help the homeowner but minimize how much they lose. They have a very thin margin for loan modification,” Shenkar said.
Gonzalez’s lender, IndyMac, looks at two things: whether modifying a borrower’s loan costs less than its estimated cost to foreclose, and whether payments can be reduced at least 10 percent and still account for no more than 38 percent of a borrower’s monthly income.“We contractually have to act in the interest of whoever owns the loan,” said Evan Wagner, an IndyMac spokesman. Wagner said the bank has mailed offers to most of those eligible for a modification, a feat, considering the program has been in effect for only around six months.
Reduced paymentsEven when payments can be reduced, homeowners have to be convinced that sticking with a loan that is higher than the home’s market value is in their best interest. In South Florida as of October, four of 10 homeowners who bought over the past five years are underwater.That’s the main reason Gonzalez has decided to walk away. Gonzalez refinanced in 2006 into an option-ARM with a balance that grew over time, rolling in other debt like credit cards.“I refinance for $245,000. I owe now $286,000 – $41,000 was of the negative amortization in a year,” Gonzalez said. Her home’s worth: $175,000.
Wagner said Gonzalez was offered a deal almost a year ago that kept her payments essentially the same and reduced her interest rate to a fixed 8.4 percent. She insists she was told differently.
There’s little IndyMac can do for her now, Wagner said, since Gonzalez’s debts were discharged in bankruptcy court. She’ll have to leave her home soon.“Where is the federal help for homeowners? Homeowners are losing in this deal and the banks are . . . not losing anything,” Gonzalez said.
But loan modifications are not about making homes better investments for borrowers, Wagner said. In fact, most homeowners will be worse off after their arrears, interest and fees are rolled into the balance after a modification, he said.“Our program is about affordability,” Wagner said. “… not about mitigating bad investment decisions. We’re not getting into that.”IndyMac’s plan, he said, allows the bank to “help those that we can without encouraging the 90 percent of people who are making payments not to default themselves,” he said.
Cecala said many homeowners figure that if a modification’s goal is solely to have their monthly payments lowered, they’d be better off renting, thinking there was little hope of ever having equity.
“What they need to do is build an incentive to keep somebody in the home,” Cecala said.As for Gonzalez, she’s fought, agonized and cried, but has finally come to terms with the idea of leaving her Kendall town house.“At this point, I don’t really care. I’m tired of this BS,” Gonzalez said.
Copyright © 2009 The Miami Herald, Monica Hatcher. Distributed by McClatchy-Tribune Information Services.
Few borrowers can revise loans, especially if debt exceeds home value.
MIAMI – Jan. 19, 2009 – Since defaulting on her mortgage more than a year ago, Marisela Gonzalez has attended foreclosure prevention seminars, spent hours on the phone with her lender, paid a consultant, availed herself of bankruptcy protection – everything in her power to hang on to her home.
“I thought to pack and just get out,” recalled the Miami-Dade special-education teacher. ‘Then, I said, ‘ No . . . this is my place. I’ve been here 15 years and I am not going to give it back to a bank just like that.’ “Yet Gonzalez is giving her Kendall townhome back to the bank, in this case the federal government, which took over lender IndyMac. Even with an offer to lower her interest rate, Gonzalez could not afford the payments and owes about $100,000 more than the house is worth.
Gonzalez’s attempts to stay in her home illustrate why regulators are having trouble stemming the flood of foreclosures at the heart of the nation’s economic crisis. And why some say it is imperative for the economy that a major chunk of the remaining $700 billion bailout bonanza go to helping homeowners drowning in debt.
Regulators, lawmakers and economists alike believe helping borrowers get into loans with more favorable terms – smaller loans, lower interest rates – is crucial to ending the recession. But despite the creation of a number of programs, only a small percentage of struggling homeowners have received help.
Lenders, watching out for their bottom lines, will go along only as long as helping the borrower will cost them less than foreclosing and reselling the home. Plus, they are skittish about staying on the hook with borrowers who are highly likely to default again.
Borrowers, for their part, often can’t afford the reduced payments. When they can, they question the sense of paying on a home that, in South Florida at least, is still falling in value. Investors, who represent a big slice of delinquent homeowners, do not qualify for a mortgage lifeline at all.
No one questions that the need is dire. Regulators from Federal Deposit Insurance Corp. Chairman Sheila Bair to Federal Reserve Chairman Ben Bernanke and the U.S. Treasury’s Neel Kashkari have repeatedly told Congress that more must be done to prevent foreclosures and stabilize falling home prices, saying both are required to lift the economy out of recession.
In November, the FDIC estimated that another 3.8 million mortgages would be 60 days to 90 days past due by the end of 2009.Yet, even the government’s own effort to modify loans, which is being held out as a national model for other lenders, has its flaws, housing advocates and other market observers said.
Of the 45,000 borrowers eligible for a workout under an FDIC program, 8,500 loans have been restructured. “Thousands more,” though, are in the pipeline, the FDIC said. The agency would not say how many borrowers could not be helped.
And Hope for Homeowners, passed by Congress in July, was expected to help 400,000 borrowers avoid foreclosure with Federal Housing Administration guarantees of up to $300 billion in refinanced loans.
So far, only 350 loans nationwide have been refinanced, according to the U.S. Department of Housing and Urban Development.Unpopular termsThe reason: Lenders have to agree to write the value of the loan down to 90 percent of the home’s current market value. Homeowners have to share half of any future equity with the federal government. Neither are eager to do that.The numbers disappoint Guy Cecala, publisher of Inside Mortgage Finance, who asserts that across-the-board, automatic modifications are needed to contain the wreckage of the last six years.
That might have been possible had bailout funds been used to buy mortgage-backed securities, putting control of the loans in the government’s hands rather than Wall Street investors, he said.“If this is the best model we’ve got, we’re still in trouble,” Cecala said. “It is probably the most aggressive we’ve seen out there and you are still not getting a lot of success.”It’s not clear what system will be used to implement a sweeping foreclosure-prevention program pledged by President-elect Barack Obama during negotiations with Congress over the release last week of $350 billion in bailout funds.
Loan modifications are different from repayment plans, which help borrowers catch up on missed payments by doing things like folding past-due amounts into the mortgage balance or boosting monthly payments by a small amount to pay arrears a bit at a time. Generally, they’re meant to see borrowers through a temporary rough patch.
Modifications take aim at the mortgage’s structure. Plans can include converting adjustable interest rates to fixed, lowering rates and, in rare cases, forgiving some of the principal. Banks often will extend the life of the loan to reduce monthly payments as well.Under intense public pressure, lenders have amped up loan modifications.
Hope Now, an alliance of nonprofits, lenders and the federal government, said more than 850,000 loans were modified through November.The FDIC says only 4 percent of seriously delinquent loans each month are being modified. And Office of the Comptroller of the Currency data suggest the modifications may ultimately not be much help. The OCC found recently that 37 percent of mortgages modified in the first quarter of 2008 were 60 days past due within six months.“Maybe the loan modification did not cut far enough; it may be that the loan was so poorly underwritten that nothing could help the borrower,” said Bryan Hubbard, an OCC spokesman. “It may be that borrower had more credit available and used it for other means and ran up debt elsewhere and the economy has taken a turn for the worse.”
Avi Shenkar, president of GMA Modification in North Miami Beach, said modifications still weren’t lowering payments enough for borrowers who took out teaser rate loans and owe far more then they could afford.He also questions how willing banks are to work with homeowners, since eight out of 10 seeking help from GMA already have been denied a modification from the bank.Jackie Duran, director of foreclosure prevention at the nonprofit Neighborhood Housing Services of South Florida, said many of their clients also got nowhere dealing with the bank.
“It’s obvious to us that lenders are not trying to help the homeowner but minimize how much they lose. They have a very thin margin for loan modification,” Shenkar said.
Gonzalez’s lender, IndyMac, looks at two things: whether modifying a borrower’s loan costs less than its estimated cost to foreclose, and whether payments can be reduced at least 10 percent and still account for no more than 38 percent of a borrower’s monthly income.“We contractually have to act in the interest of whoever owns the loan,” said Evan Wagner, an IndyMac spokesman. Wagner said the bank has mailed offers to most of those eligible for a modification, a feat, considering the program has been in effect for only around six months.
Reduced paymentsEven when payments can be reduced, homeowners have to be convinced that sticking with a loan that is higher than the home’s market value is in their best interest. In South Florida as of October, four of 10 homeowners who bought over the past five years are underwater.That’s the main reason Gonzalez has decided to walk away. Gonzalez refinanced in 2006 into an option-ARM with a balance that grew over time, rolling in other debt like credit cards.“I refinance for $245,000. I owe now $286,000 – $41,000 was of the negative amortization in a year,” Gonzalez said. Her home’s worth: $175,000.
Wagner said Gonzalez was offered a deal almost a year ago that kept her payments essentially the same and reduced her interest rate to a fixed 8.4 percent. She insists she was told differently.
There’s little IndyMac can do for her now, Wagner said, since Gonzalez’s debts were discharged in bankruptcy court. She’ll have to leave her home soon.“Where is the federal help for homeowners? Homeowners are losing in this deal and the banks are . . . not losing anything,” Gonzalez said.
But loan modifications are not about making homes better investments for borrowers, Wagner said. In fact, most homeowners will be worse off after their arrears, interest and fees are rolled into the balance after a modification, he said.“Our program is about affordability,” Wagner said. “… not about mitigating bad investment decisions. We’re not getting into that.”IndyMac’s plan, he said, allows the bank to “help those that we can without encouraging the 90 percent of people who are making payments not to default themselves,” he said.
Cecala said many homeowners figure that if a modification’s goal is solely to have their monthly payments lowered, they’d be better off renting, thinking there was little hope of ever having equity.
“What they need to do is build an incentive to keep somebody in the home,” Cecala said.As for Gonzalez, she’s fought, agonized and cried, but has finally come to terms with the idea of leaving her Kendall town house.“At this point, I don’t really care. I’m tired of this BS,” Gonzalez said.
Copyright © 2009 The Miami Herald, Monica Hatcher. Distributed by McClatchy-Tribune Information Services.
Monday, January 5, 2009
The Housing Picture
Here is an update or a look at the Real Estate status in Broward County. Prices are still falling. Out of the 50 some odd homes in the list in Jacaranda, more than 30 had price reductions.
The number of short sales (Selling for less than is owed and the lender agrees to take a loss) and foreclosures are keepin the prices low.
Great time to buy and hold, tough time to sell. Keep in mind, though, that your home went up in value anywhere from 20 to 30% for two years!
The number of short sales (Selling for less than is owed and the lender agrees to take a loss) and foreclosures are keepin the prices low.
Great time to buy and hold, tough time to sell. Keep in mind, though, that your home went up in value anywhere from 20 to 30% for two years!
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