So you want to sell a home in 2010? Think January, not June.
Not only are prices expected to keep falling, cutting into sellers' profits the longer they wait, but demand will be strong early in the year from first-time and move-up buyers looking to qualify for tax credits that expire April 30.
"If I had a home that I wanted to get as much money for as I could, I'd sell it as soon as possible," said Chris Lafakis, an economist for Moody's Economy.com in West Chester, Pa.
Richard Griest, 58, is selling his three-bedroom home in Margate. It's listed for $275,000, down from $299,000. "I'm a motivated seller, but I'm not going to give the thing away," he said.
Griest's real estate agent, Michael Citron, isn't advocating any fire sale, but he has stressed to his client that time is of the essence.
Griest's neighborhood is full of foreclosures and short sales, which will hurt prices of all neighboring properties. Even if Griest accepts an offer in the $250,000 range, that would be better than holding out and watching the distressed sales set a much lower standard for prices in the area, Citron said.
"More distressed sales are happening and will continue to happen in 2010," said Citron of RE/MAX ParkCreek in Coconut Creek. "The market will continue to decline in value."
While some real estate observers insist South Florida's housing prices can't fall much more than they have, others say the lingering recession and rising unemployment will hurt the market next year.
Potentially playing a large role will be a so-called shadow inventory of homes – repossessed properties that haven't been put on the market for resale and mortgages that are in default and soon will be in foreclosure.
"Option ARM" adjustable-rate mortgages are due to reset higher in the next two years, leading to more foreclosures. And Miami-Dade, Broward and Palm Beach counties are among the leaders nationwide in first-mortgage defaults, according to Economy.com.
The firm expects South Florida home prices to bottom at the end of 2010, but not before they drop another 24 percent in Palm Beach County and another 30 percent in Broward. That would put Palm Beach County's median price at less than $175,000 and Broward's median in the $130,000 range.
Already, prices have plummeted by more than 40 percent in both counties since the housing markets peaked in November 2005.
Sales of existing homes have increased steadily for the past year, but half to two-thirds of the transactions involve foreclosures and short sales, agents say.
Scott Agran, head of Lang Realty in Broward and Palm Beach counties, said the housing recovery will happen once the economy improves.
"Not a lot of people are buying because it's the right home on the right lot," Agran said. "Most people are in the market to find a really good buy. There's not a lot of normal purchasing."
Still, some market followers take issue with the dire price forecasts for 2010.
Mike Pappas, president of the Miami-based Keyes Co., expects foreclosures will "seep out slowly" as lenders are careful not to deluge the market with more vacant homes.
"I think we'll be able to handle it," Pappas said.
Douglas Rill, broker/owner of Century 21 America's Choice in West Palm Beach, also is optimistic. Lenders and borrowers are better prepared now than in previous years, which will lead to more people staying their homes, he said.
Rill said the large price declines have flattened over the past 12 months, and inventory of homes for sale has steadily decreased.
"I do not jump on the bandwagon of super declines in value," Rill said. "I think that's significantly overstated."
Source:http://www.sun-sentinel.com/business/realestate/fl-home-sell-yearahead-20091228,0,422089.story
Paul Owers can be reached at Powers@Sunsentinel.com or 561-243-6529
The Criscitos has been selling South Florida luxury and commercial real estate for over a decade and has sold over $1 billion dollars of property. They work as a multi-lingual team speaking english, Spanish, Italian and Portuguese. They carved out a niche as a leading boutique real estate company with two distinct divisions -residential and commercial- both personally overseeing by Marcela and Anthony Criscito.
Thursday, December 31, 2009
Wednesday, December 30, 2009
Florida requires mediation in foreclosure disputes
Florida's troubled homeowners and their lenders will increasingly meet at the bargaining table under a new state supreme court order that aims to reduce a foreclosure overload.
The administrative order written by Chief Judge Peggy Quince creates a statewide program that requires mediation on all homesteaded properties before a foreclosure hearing is held.
It guarantees homeowners will have an audience with their lender to discuss whether a loan modification or short sale is an option instead of foreclosure. It also means lenders will be doing more work on the front end of the foreclosure process, and paying for it.
The order makes lenders responsible for paying a maximum mediation fee of $750 per case, which would help pay for the mediator and cover administrative costs. Judges hope the mediation requirement will reduce the thousands of foreclosure cases clogging the system, a situation called "horrifying" in an August report issued by Florida's Task Force on Residential Mortgage Foreclosure Cases.
"Right now, we have a court system that is going to break with the volume of foreclosures," said Boca Raton real estate attorney Marlyn Wiener. "We're at a meltdown point and have to find new ways to manage the situation."
In Palm Beach County, more than 27,550 foreclosures were filed between January and November this year — nine times the amount filed in all of 2004. For the 2009 calendar year, 52,000 foreclosure cases were filed in the Broward County court system, up from roughly 45,000 in 2008, according to Clerk of Courts Howard C. Forman.
"It's a good thing. … I applaud the ruling," Forman said on Tuesday, from the state's 17th Judicial Circuit, which doesn't have a foreclosure mediation program.
Mandatory mediation won't lighten the foreclosure load right now, but it could give people in financial straits who are heading to foreclosure a "fairer shake," Forman said.
An administrative order from Chief Circuit Judge Victor Tobin would be the 'trigger' needed to start the mediation ball rolling in Broward, Forman said.
Each circuit court will approve its own mandatory program and will have some leeway in how it is managed, according to the ruling. The main parts of the order, however, are the same statewide.
Every residential homesteaded property foreclosure will be referred to mediation, unless the lender and borrower agree otherwise. There are also waivers in the event a homeowner cannot be located or refuses mediation.
The homeowner must be referred to foreclosure counseling before mediation. The mediation must take place no earlier than 60 days and no later than 120 days after a foreclosure suit is filed. And the mediation must be provided by a nonprofit organization with mediators specially trained and court certified in mortgage foreclosure matters.
Judges say they often hear homeowners complain that they couldn't reach their lender or that their paperwork was repeatedly lost.
Sharon Bock, Palm Beach County's comptroller and clerk of the circuit court, said she's concerned that although it may alleviate judge workload, it could increase paperwork for her employees.
Foreclosure mediation has been optional in Palm Beach County for at least a year. Bock thinks mandatory mediation isn't a role the court should play.
"This process moves the courts from calling balls and strikes, from creating a level playing field, into the realm of a social service agency, picking sides," she said.
Three circuit courts began requiring foreclosure mediation earlier this year: the First Circuit in the Panhandle, Ninteenth Circuit in Martin County and the Eleventh Circuit in Miami-Dade County.
Rod Petrey, president of the Collins Center for Public Policy, the nonprofit organization that's handling these mediations, said results are mixed.
Since the program began in April or May, he says 20,000 cases have been referred to the center for mediation. But Petrey says he suspects that not all lenders are sending all the cases that qualify.
"I don't have 100 percent compliance, but every little bit helps," he said.
Of those 20,000 cases, Petrey says two-thirds have been settled out of court and the borrower has been able to avoid foreclosure.
Florida is at the center of the foreclosure problem. In the third quarter of this year, the state's 12.74 percent rate of home loans in foreclosure was the nation's highest, according to figures from the Mortgage Bankers Association. That means 441,440 Florida home loans were in foreclosure at that time.
Source: http://www.sun-sentinel.com/business/fl-mediation-stp-20091229,0,6841063.story
Sun Sentinel staff writers Harriet Johnson Brackey and Arlene Satchell contributed to this report.
The administrative order written by Chief Judge Peggy Quince creates a statewide program that requires mediation on all homesteaded properties before a foreclosure hearing is held.
It guarantees homeowners will have an audience with their lender to discuss whether a loan modification or short sale is an option instead of foreclosure. It also means lenders will be doing more work on the front end of the foreclosure process, and paying for it.
The order makes lenders responsible for paying a maximum mediation fee of $750 per case, which would help pay for the mediator and cover administrative costs. Judges hope the mediation requirement will reduce the thousands of foreclosure cases clogging the system, a situation called "horrifying" in an August report issued by Florida's Task Force on Residential Mortgage Foreclosure Cases.
"Right now, we have a court system that is going to break with the volume of foreclosures," said Boca Raton real estate attorney Marlyn Wiener. "We're at a meltdown point and have to find new ways to manage the situation."
In Palm Beach County, more than 27,550 foreclosures were filed between January and November this year — nine times the amount filed in all of 2004. For the 2009 calendar year, 52,000 foreclosure cases were filed in the Broward County court system, up from roughly 45,000 in 2008, according to Clerk of Courts Howard C. Forman.
"It's a good thing. … I applaud the ruling," Forman said on Tuesday, from the state's 17th Judicial Circuit, which doesn't have a foreclosure mediation program.
Mandatory mediation won't lighten the foreclosure load right now, but it could give people in financial straits who are heading to foreclosure a "fairer shake," Forman said.
An administrative order from Chief Circuit Judge Victor Tobin would be the 'trigger' needed to start the mediation ball rolling in Broward, Forman said.
Each circuit court will approve its own mandatory program and will have some leeway in how it is managed, according to the ruling. The main parts of the order, however, are the same statewide.
Every residential homesteaded property foreclosure will be referred to mediation, unless the lender and borrower agree otherwise. There are also waivers in the event a homeowner cannot be located or refuses mediation.
The homeowner must be referred to foreclosure counseling before mediation. The mediation must take place no earlier than 60 days and no later than 120 days after a foreclosure suit is filed. And the mediation must be provided by a nonprofit organization with mediators specially trained and court certified in mortgage foreclosure matters.
Judges say they often hear homeowners complain that they couldn't reach their lender or that their paperwork was repeatedly lost.
Sharon Bock, Palm Beach County's comptroller and clerk of the circuit court, said she's concerned that although it may alleviate judge workload, it could increase paperwork for her employees.
Foreclosure mediation has been optional in Palm Beach County for at least a year. Bock thinks mandatory mediation isn't a role the court should play.
"This process moves the courts from calling balls and strikes, from creating a level playing field, into the realm of a social service agency, picking sides," she said.
Three circuit courts began requiring foreclosure mediation earlier this year: the First Circuit in the Panhandle, Ninteenth Circuit in Martin County and the Eleventh Circuit in Miami-Dade County.
Rod Petrey, president of the Collins Center for Public Policy, the nonprofit organization that's handling these mediations, said results are mixed.
Since the program began in April or May, he says 20,000 cases have been referred to the center for mediation. But Petrey says he suspects that not all lenders are sending all the cases that qualify.
"I don't have 100 percent compliance, but every little bit helps," he said.
Of those 20,000 cases, Petrey says two-thirds have been settled out of court and the borrower has been able to avoid foreclosure.
Florida is at the center of the foreclosure problem. In the third quarter of this year, the state's 12.74 percent rate of home loans in foreclosure was the nation's highest, according to figures from the Mortgage Bankers Association. That means 441,440 Florida home loans were in foreclosure at that time.
Source: http://www.sun-sentinel.com/business/fl-mediation-stp-20091229,0,6841063.story
Sun Sentinel staff writers Harriet Johnson Brackey and Arlene Satchell contributed to this report.
Tuesday, December 29, 2009
Florida real estate agents report signs of recovery in property market as sales move up
Florida, one of the most popular US states with overseas real estate buyers and one of the areas to suffer the largest property price falls in the global economic downturn, is well on the way to recovery, it is claimed.
Property sales in November climbed 61% from the same month in 2008, the 15th straight month in a row in which existing home sales increases year on year, says a report from Florida Realtors. While condo sales increased 111% from last year, the report also shows and total sales are not far from peak levels in 2005 when Florida Realtors reported 17,219 state wide home sales that November.
The state's prices though are still far from 2005's peak of $250,500. Florida's median sales price has fallen 12% from $158,200 a year ago to $139,000 in November. In 2004, November's median sales price was $192,400, which shows how quickly the bubble grew. Prices after the burst, however, seem to be inching toward 2004 levels, the report points out.
'The continued, gradual absorption of housing inventory will help stabilize home prices. National research notes that housing affordability is at its peak and the highest on record,' said Cynthia Shelton, Florida Realtors' president.
'Along with still low mortgage rates, it means that the buying power of a typical family has never been better,' she added.
For the second consecutive month, all of Florida's metropolitan statistical areas (MSAs) reported increased home and condo sales. Of the smaller markets, Tallahassee reported 174 homes sold in November, an increase from 100 a year earlier. That market's median sales price dropped 5%, however, to $162,000 from $170,000 a year ago.
Meanwhile the latest report from the US Census Bureau and the Department of Housing and Urban Development shows that overall in the US sales of new, single family homes in November dropped 11.3% from the previous month.
Sales in November reached a seasonally adjusted annual rate of 355,000, according to the report, a fall from 400,000 in October and a 9% drop from November 2008's 390,000. The South led all regions in sales, totalling 179,000 sales in November, according to the data. The West was second with 79,000 sales. The Midwest had 68,000 sales, and the Northeast moved 29,000 homes in November.
Source: http://www.propertycommunity.com/property-in-the-us/498-florida-real-estate-recovery-move-up.html
Property sales in November climbed 61% from the same month in 2008, the 15th straight month in a row in which existing home sales increases year on year, says a report from Florida Realtors. While condo sales increased 111% from last year, the report also shows and total sales are not far from peak levels in 2005 when Florida Realtors reported 17,219 state wide home sales that November.
The state's prices though are still far from 2005's peak of $250,500. Florida's median sales price has fallen 12% from $158,200 a year ago to $139,000 in November. In 2004, November's median sales price was $192,400, which shows how quickly the bubble grew. Prices after the burst, however, seem to be inching toward 2004 levels, the report points out.
'The continued, gradual absorption of housing inventory will help stabilize home prices. National research notes that housing affordability is at its peak and the highest on record,' said Cynthia Shelton, Florida Realtors' president.
'Along with still low mortgage rates, it means that the buying power of a typical family has never been better,' she added.
For the second consecutive month, all of Florida's metropolitan statistical areas (MSAs) reported increased home and condo sales. Of the smaller markets, Tallahassee reported 174 homes sold in November, an increase from 100 a year earlier. That market's median sales price dropped 5%, however, to $162,000 from $170,000 a year ago.
Meanwhile the latest report from the US Census Bureau and the Department of Housing and Urban Development shows that overall in the US sales of new, single family homes in November dropped 11.3% from the previous month.
Sales in November reached a seasonally adjusted annual rate of 355,000, according to the report, a fall from 400,000 in October and a 9% drop from November 2008's 390,000. The South led all regions in sales, totalling 179,000 sales in November, according to the data. The West was second with 79,000 sales. The Midwest had 68,000 sales, and the Northeast moved 29,000 homes in November.
Source: http://www.propertycommunity.com/property-in-the-us/498-florida-real-estate-recovery-move-up.html
Monday, December 28, 2009
South Florida homeowners score by renting to Super Bowl fans
When South Florida hosted the Super Bowl in 2007, the average hotel room cost $499 a night.
For the 2010 game, Davona Lynch would just like everyone to know that her three-bedroom, two-bath home, 15 minutes from Land Shark Stadium, is available for a nightly rate of just $300.
Also — and this is her end run around traditional inns — pets are welcome.
Lynch is among many South Floridians hanging vacancy signs on their homes for the Super Bowl and Pro Bowl, both of which will be played in Miami Gardens.
And while it's not unusual for homeowners to become hoteliers during notable events, it may be a more common sight this Super Bowl season, for several reasons.
More vacant homes are on the market following the real estate collapse. High unemployment has people looking for ways to make the mortgage. With pro football's two premier events on consecutive weekends, more fans will want to stay the entire week to catch both games.
While Lynch acknowledges her Hollywood home is not brand new, or outfitted with luxury amenities, she thinks it's a good option for a family wanting access to a kitchen and laundry room, or a group of friends who just need a place to rest their heads. She has listed her home on Craigslist.
"We're all trying to make ends meet, and sometimes to do that you have to think outside the box," said Lynch, who will stay with relatives if she finds a renter. "If I don't find anyone, I won't be too disappointed. At least I made an effort to help myself during these difficult times."
The Pro Bowl is expected to draw a large stadium audience because it's the first time since 1979 that the game matching AFC and NFC all-stars will be played outside Hawaii. It will be played Jan. 31, a week before the Feb. 7 Super Bowl.
Miami-Dade, Broward and Palm Beach counties have an estimated 91,000 hotel rooms — more than enough to accommodate Super Bowl crowds.
But Kathleen Davis, president of the West Palm Beach-based Sports Management Research Institute, which compiled the 2007 average hotel room cost, said she doesn't think the availability of private homes for rent will affect Super Bowl hotel profits.
In fact, the demand for rooms may be greater this year because some people who don't have tickets will want to revel in the atmosphere of the two-game event.
Meanwhile, football players' families may be making the trek for both games, increasing the rental opportunities for high-end homes needed for an entourage.
"I never claim to know what will happen, but I think this is going to be a healthy bump for the whole market," Davis said. "Whether they stay at a hotel or a private condo, they are still supporting local businesses."
The variety of private residences available for Super Bowl week ranges from Lynch's $300-a-night home to a single Boca Raton bedroom for $500 a night to Earl Hord's Pompano Beach home with steam room, grand piano and three-car garage for $15,000 a week.
Hord bought the 5,000-square-foot home intending to flip it for a profit. He spent $300,000 on upgrades, then the market collapsed. Hord and his wife now live mostly in their 900-square-foot condo in Boca Raton.
"This is something we can do to recoup some of our losses," Hord said. "You can put as many as 10 people in it, and when you think of it like that, $15,000 isn't a staggering dollar amount."
Dave Erickson, pres-ident of the Web site Superbstays.com, which lists homes for rent for the Super Bowl and the Olympics, said he has seen luxury estates with full use of high-end sports cars and maid service available, if people are willing to pay.
Then there's the guy who happens upon a Super Bowl ticket and needs a bed just for the night, Erickson said.
"You can put anything up there, even a dumpy place, just don't ask a ridiculous amount of money for it," he said. "The biggest advantage a place can offer is proximity to the stadium."
Source: http://www.palmbeachpost.com/news/south-florida-homeowners-score-by-renting-to-super-151464.html
For the 2010 game, Davona Lynch would just like everyone to know that her three-bedroom, two-bath home, 15 minutes from Land Shark Stadium, is available for a nightly rate of just $300.
Also — and this is her end run around traditional inns — pets are welcome.
Lynch is among many South Floridians hanging vacancy signs on their homes for the Super Bowl and Pro Bowl, both of which will be played in Miami Gardens.
And while it's not unusual for homeowners to become hoteliers during notable events, it may be a more common sight this Super Bowl season, for several reasons.
More vacant homes are on the market following the real estate collapse. High unemployment has people looking for ways to make the mortgage. With pro football's two premier events on consecutive weekends, more fans will want to stay the entire week to catch both games.
While Lynch acknowledges her Hollywood home is not brand new, or outfitted with luxury amenities, she thinks it's a good option for a family wanting access to a kitchen and laundry room, or a group of friends who just need a place to rest their heads. She has listed her home on Craigslist.
"We're all trying to make ends meet, and sometimes to do that you have to think outside the box," said Lynch, who will stay with relatives if she finds a renter. "If I don't find anyone, I won't be too disappointed. At least I made an effort to help myself during these difficult times."
The Pro Bowl is expected to draw a large stadium audience because it's the first time since 1979 that the game matching AFC and NFC all-stars will be played outside Hawaii. It will be played Jan. 31, a week before the Feb. 7 Super Bowl.
Miami-Dade, Broward and Palm Beach counties have an estimated 91,000 hotel rooms — more than enough to accommodate Super Bowl crowds.
But Kathleen Davis, president of the West Palm Beach-based Sports Management Research Institute, which compiled the 2007 average hotel room cost, said she doesn't think the availability of private homes for rent will affect Super Bowl hotel profits.
In fact, the demand for rooms may be greater this year because some people who don't have tickets will want to revel in the atmosphere of the two-game event.
Meanwhile, football players' families may be making the trek for both games, increasing the rental opportunities for high-end homes needed for an entourage.
"I never claim to know what will happen, but I think this is going to be a healthy bump for the whole market," Davis said. "Whether they stay at a hotel or a private condo, they are still supporting local businesses."
The variety of private residences available for Super Bowl week ranges from Lynch's $300-a-night home to a single Boca Raton bedroom for $500 a night to Earl Hord's Pompano Beach home with steam room, grand piano and three-car garage for $15,000 a week.
Hord bought the 5,000-square-foot home intending to flip it for a profit. He spent $300,000 on upgrades, then the market collapsed. Hord and his wife now live mostly in their 900-square-foot condo in Boca Raton.
"This is something we can do to recoup some of our losses," Hord said. "You can put as many as 10 people in it, and when you think of it like that, $15,000 isn't a staggering dollar amount."
Dave Erickson, pres-ident of the Web site Superbstays.com, which lists homes for rent for the Super Bowl and the Olympics, said he has seen luxury estates with full use of high-end sports cars and maid service available, if people are willing to pay.
Then there's the guy who happens upon a Super Bowl ticket and needs a bed just for the night, Erickson said.
"You can put anything up there, even a dumpy place, just don't ask a ridiculous amount of money for it," he said. "The biggest advantage a place can offer is proximity to the stadium."
Source: http://www.palmbeachpost.com/news/south-florida-homeowners-score-by-renting-to-super-151464.html
Wednesday, December 23, 2009
Home sales up 7.4% for November
November home sales rose nationally by 7.4 percent and are at the highest level in nearly three years.
Sales last month were bolstered by the first-time homebuyer tax credit, which was set to expire Nov. 30. These buyers purchased 51 percent of the homes sold in November.
That $8,000 tax credit was extended for the first four months of 2010 and expanded to grant a $6,500 credit to move-up buyers.
Sales of existing homes rose to a seasonally adjusted annual rate of 6.54 million units in November from 6.09 million in October, the National Association of Realtors reported Tuesday. Sales rose 44 percent from the 4.54-million-unit pace in November 2008.
"This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead," said Lawrence Yun, the association's chief economist.
Yun said he is hopeful that the market, which has been propped up by the federal government incentives, would be self-sustaining by the second half of 2010.
Total housing inventory fell by 1.3 percent to 3.52 million existing homes for sale or a 6.5-month supply at the current sales pace. The national median existing-home price was $172,600 last month, a 4.3 percent decline from the same month last year.
Source: http://www.miamiherald.com/classifieds/real-estate/story/1394773.html
Sales last month were bolstered by the first-time homebuyer tax credit, which was set to expire Nov. 30. These buyers purchased 51 percent of the homes sold in November.
That $8,000 tax credit was extended for the first four months of 2010 and expanded to grant a $6,500 credit to move-up buyers.
Sales of existing homes rose to a seasonally adjusted annual rate of 6.54 million units in November from 6.09 million in October, the National Association of Realtors reported Tuesday. Sales rose 44 percent from the 4.54-million-unit pace in November 2008.
"This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead," said Lawrence Yun, the association's chief economist.
Yun said he is hopeful that the market, which has been propped up by the federal government incentives, would be self-sustaining by the second half of 2010.
Total housing inventory fell by 1.3 percent to 3.52 million existing homes for sale or a 6.5-month supply at the current sales pace. The national median existing-home price was $172,600 last month, a 4.3 percent decline from the same month last year.
Source: http://www.miamiherald.com/classifieds/real-estate/story/1394773.html
Tuesday, December 22, 2009
Tips for Homeowners: How to Budget for Home Maintenance
While buying a home is a huge financial expenditure, homeowners need to keep in mind that the spending doesn’t stop once the home is purchased. Whether you are moving into a new or old home, homeowners need to be aware of the ongoing maintenance that any home requires. Here, Dan Steward, President, Pillar To Post discusses what homeowners need to know when it comes to ongoing home maintenance.
It’s important for Realtors to remind home buyers that all homes—old or new—need ongoing maintenance.
First, buyers should understand the 1% rule. This rule postulates that normal maintenance on a home is about 1% of the value of the home per year. For example, a $250,000 home would require $2,500 per year to maintain. This would be enough to replace the roof covering…and then, a few years later, to replace a failed hot water tank…and then a few years more until a new central air system is required.
Then there is the 3% rule. Some experts say that home buyers should plan on spending 3% of the value of the home in the first year of ownership. This is because new homeowners will most likely have to buy drapes, blinds, a washer and dryer, a stove, maybe even a new roof covering. Also, new homeowners often customize the environment to their taste, so they need to budget for repairs, replacements and maintenance.
In addition, most home components have fairly predictable life cycles. For example, the typical life cycle of a high-efficiency furnace is 15 to 20 years. What this means is that most high-efficiency furnaces last between 15 and 20 years.
One way to know the extent of the maintenance needed and the costs to repair and/or replace items is to have a home inspection conducted. Home inspectors are required to let the buyer know if a component is significantly deficient or if it is near the end of its life cycle (service life), and a reputable home inspection company may offer up-to-date repair-cost guides to help clients with their planning.
Home inspectors work with Realtors and buyers to help them understand the issues that are found in the home, regardless of age, offering the right perspective and objective information. Home buyers need to understand that it’s normal for items in a home to wear out. This should be regarded as normal “wear and tear” and not necessarily a defect.
A good home inspection determines the current condition of the house, offering a report of all the systems and components in need of maintenance, service, repair or replacement.
For example, consider a home inspection that uncovers that the heating system is old and requires replacement. A home buyer may see this as a huge problem. However, this problem may be the only item in the home that requires attention. If a buyer were to look at this situation in perspective, this home could be well above average—a home merely requiring a new furnace.
A good home inspection provides objective information to help the buyer make an informed decision. Knowing what items need to be budgeted for repair or replacement will help home buyers plan or negotiate better and not be stuck with unexpected costs of hundreds, or even thousands of dollars in the long run. Also, fixing these items will make a marked improvement on the performance of a home and minimize issues that could affect its future integrity…and value.
Source: http://rismedia.com/2009-12-21/tips-for-homeowners-how-to-budget-for-home-maintenance/#ixzz0aR0URYQt
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
It’s important for Realtors to remind home buyers that all homes—old or new—need ongoing maintenance.
First, buyers should understand the 1% rule. This rule postulates that normal maintenance on a home is about 1% of the value of the home per year. For example, a $250,000 home would require $2,500 per year to maintain. This would be enough to replace the roof covering…and then, a few years later, to replace a failed hot water tank…and then a few years more until a new central air system is required.
Then there is the 3% rule. Some experts say that home buyers should plan on spending 3% of the value of the home in the first year of ownership. This is because new homeowners will most likely have to buy drapes, blinds, a washer and dryer, a stove, maybe even a new roof covering. Also, new homeowners often customize the environment to their taste, so they need to budget for repairs, replacements and maintenance.
In addition, most home components have fairly predictable life cycles. For example, the typical life cycle of a high-efficiency furnace is 15 to 20 years. What this means is that most high-efficiency furnaces last between 15 and 20 years.
One way to know the extent of the maintenance needed and the costs to repair and/or replace items is to have a home inspection conducted. Home inspectors are required to let the buyer know if a component is significantly deficient or if it is near the end of its life cycle (service life), and a reputable home inspection company may offer up-to-date repair-cost guides to help clients with their planning.
Home inspectors work with Realtors and buyers to help them understand the issues that are found in the home, regardless of age, offering the right perspective and objective information. Home buyers need to understand that it’s normal for items in a home to wear out. This should be regarded as normal “wear and tear” and not necessarily a defect.
A good home inspection determines the current condition of the house, offering a report of all the systems and components in need of maintenance, service, repair or replacement.
For example, consider a home inspection that uncovers that the heating system is old and requires replacement. A home buyer may see this as a huge problem. However, this problem may be the only item in the home that requires attention. If a buyer were to look at this situation in perspective, this home could be well above average—a home merely requiring a new furnace.
A good home inspection provides objective information to help the buyer make an informed decision. Knowing what items need to be budgeted for repair or replacement will help home buyers plan or negotiate better and not be stuck with unexpected costs of hundreds, or even thousands of dollars in the long run. Also, fixing these items will make a marked improvement on the performance of a home and minimize issues that could affect its future integrity…and value.
Source: http://rismedia.com/2009-12-21/tips-for-homeowners-how-to-budget-for-home-maintenance/#ixzz0aR0URYQt
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Monday, December 21, 2009
Proposed law would spur bulk condo buys
A proposed law would change the legal liability bulk buyers of distressed condos face in Florida, potentially energizing a sector that has been relatively quiet despite an over-abundance of inventory.
State Rep. Julio Robaina, R-Miami, and state Sen. Eleanor Sobel, D-Hollywood, are sponsoring identical bills designed to spur bulk-buying activity, accelerating Florida’s residential real estate recovery.
Robaina said HB 327 would also go far in alleviating individual unit owners from having to make up for owners who aren’t paying their maintenance fees.
Sobel said she’s been getting strong feedback from homeowner associations that are suffering financially as a result of delinquent owners. She hopes SB 840 would help address delinquency issues and eliminate some federal prohibitions on lending due to delinquent owners.
Existing law states that a buyer of seven or more units in a building with 70 or more units becomes responsible for all liabilities normally assumed by the project developer, including defects and issues with common areas.
The liability issue has killed a significant number of developing deals, said Mark Grant, a partner at Ruden McClosky, who worked with both legislators to craft the bill. Investors have pushed down pricing to incorporate the risk into their bulk bids, which has prompted developers and lenders to reject offers.
The bill will alleviate some of that pressure on pricing, which will help stabilize projects, he said.
The pace of bulk transactions has been accelerated at the end of the year. A recent deal involved the bulk buy of 20 units at Artech Residences at Aventura for $6.3 million – 31 percent less per square foot than another bulk purchase that occurred there this summer.
In all, 30 condo bulk deals with new or renovated product have closed in South Florida since last summer, accounting for 2,500 units and 3 million square feet of space, according to Condo Vultures.
Those numbers could easily double next year if the bill passes, said Jack McCabe, CEO of McCabe Research & Consulting in Deerfield Beach.
Grant explained that, in order to get widespread support, bill supporters had to make some concessions, including prohibiting bulk buyers from voting to waive an association’s funding reserves.
Another detail that may benefit all players is that bulk buyers could negotiate with the developer or lender to accept some ownership rights. For example, an investor might want to buy control of the common area rights around the pool if they are buying 50 units around the pool. That way, the investor can upgrade the pool facilities and charge a premium for the units, Grant said.
McCabe said the proposed changes in the law would also create a more favorable environment for lenders to foreclose and resell units.
He noted that this version of the bill would likely not suffer the same fate as it predecessor did during the last legislative session. A bulk buyer bill failed, crushed under the weight of controversial amendments.
But, legislators can’t address some issues plaguing condominiums. The bill won’t address restrictions placed on buildings by federal lenders who won’t lend in buildings with bulk-buying activity greater than 10 percent.
Said McCabe: “That’s going to continue to be a problem.”
Source: http://southflorida.bizjournals.com/southflorida/stories/2009/12/21/focus4.html?b=1261371600^2605991
omusibay@bizjournals.com | (954) 949-7567
State Rep. Julio Robaina, R-Miami, and state Sen. Eleanor Sobel, D-Hollywood, are sponsoring identical bills designed to spur bulk-buying activity, accelerating Florida’s residential real estate recovery.
Robaina said HB 327 would also go far in alleviating individual unit owners from having to make up for owners who aren’t paying their maintenance fees.
Sobel said she’s been getting strong feedback from homeowner associations that are suffering financially as a result of delinquent owners. She hopes SB 840 would help address delinquency issues and eliminate some federal prohibitions on lending due to delinquent owners.
Existing law states that a buyer of seven or more units in a building with 70 or more units becomes responsible for all liabilities normally assumed by the project developer, including defects and issues with common areas.
The liability issue has killed a significant number of developing deals, said Mark Grant, a partner at Ruden McClosky, who worked with both legislators to craft the bill. Investors have pushed down pricing to incorporate the risk into their bulk bids, which has prompted developers and lenders to reject offers.
The bill will alleviate some of that pressure on pricing, which will help stabilize projects, he said.
The pace of bulk transactions has been accelerated at the end of the year. A recent deal involved the bulk buy of 20 units at Artech Residences at Aventura for $6.3 million – 31 percent less per square foot than another bulk purchase that occurred there this summer.
In all, 30 condo bulk deals with new or renovated product have closed in South Florida since last summer, accounting for 2,500 units and 3 million square feet of space, according to Condo Vultures.
Those numbers could easily double next year if the bill passes, said Jack McCabe, CEO of McCabe Research & Consulting in Deerfield Beach.
Grant explained that, in order to get widespread support, bill supporters had to make some concessions, including prohibiting bulk buyers from voting to waive an association’s funding reserves.
Another detail that may benefit all players is that bulk buyers could negotiate with the developer or lender to accept some ownership rights. For example, an investor might want to buy control of the common area rights around the pool if they are buying 50 units around the pool. That way, the investor can upgrade the pool facilities and charge a premium for the units, Grant said.
McCabe said the proposed changes in the law would also create a more favorable environment for lenders to foreclose and resell units.
He noted that this version of the bill would likely not suffer the same fate as it predecessor did during the last legislative session. A bulk buyer bill failed, crushed under the weight of controversial amendments.
But, legislators can’t address some issues plaguing condominiums. The bill won’t address restrictions placed on buildings by federal lenders who won’t lend in buildings with bulk-buying activity greater than 10 percent.
Said McCabe: “That’s going to continue to be a problem.”
Source: http://southflorida.bizjournals.com/southflorida/stories/2009/12/21/focus4.html?b=1261371600^2605991
omusibay@bizjournals.com | (954) 949-7567
Friday, December 18, 2009
IHS: Florida realizing home value gains
Hit hard by the housing downturn, Florida is one of two states that realized gains of more than 4 percent in home prices, according to a quarterly housing valuation analysis by IHS Global Insight.
In South Florida, prices started to inch up in the third quarter.
In the Miami metropolitan area, prices increased to an average of $191,200 from $182,900 in the previous quarter. However, they remain down significantly from the third quarter of 2007, when the average price was $312,600.
The Fort Lauderdale metropolitan area saw a slight improvement, with an average price in the third quarter of $148,000, up from $147,700 in the previous quarter, but still down from $248,600 in the third quarter of 2007.
The West Palm Beach metropolitan area saw the average home price inch up to $164,400 in the third quarter from $163,600 in the previous quarter. In the third quarter of 2007, the average home price was $262,000.
Nationwide, in year-over-year terms, house prices increased during the third quarter by 0.9 percent, according to the Federal Housing Finance Agency, the first since the second quarter of 2007, when the national housing market began its slide. From its peak in 2007, the U.S. housing market is now down 10.7 percent, on average, the IHS noted.
For the first time since the IHS study began in 2005, no metropolitan areas were extremely overvalued. There were 52 in 2005.
Homes in Miami-Dade County were deemed fairly valued, while those in Broward and Palm Beach counties were considered undervalued.
For the nation as a whole, the housing market is now slightly undervalued – 8.6 percent when weighted by market value and 10.1 percent when weighted by housing units, according to IHS.
“While the rate of decline has decreased throughout the year as the market began to stabilize,” said James Diffley, group managing director of IHS Global Insight's Regional Services Group, in a news release. "It's not at all clear that the market is on a recovery path."
Source: http://southflorida.bizjournals.com/southflorida/stories/2009/12/14/daily68.html
In South Florida, prices started to inch up in the third quarter.
In the Miami metropolitan area, prices increased to an average of $191,200 from $182,900 in the previous quarter. However, they remain down significantly from the third quarter of 2007, when the average price was $312,600.
The Fort Lauderdale metropolitan area saw a slight improvement, with an average price in the third quarter of $148,000, up from $147,700 in the previous quarter, but still down from $248,600 in the third quarter of 2007.
The West Palm Beach metropolitan area saw the average home price inch up to $164,400 in the third quarter from $163,600 in the previous quarter. In the third quarter of 2007, the average home price was $262,000.
Nationwide, in year-over-year terms, house prices increased during the third quarter by 0.9 percent, according to the Federal Housing Finance Agency, the first since the second quarter of 2007, when the national housing market began its slide. From its peak in 2007, the U.S. housing market is now down 10.7 percent, on average, the IHS noted.
For the first time since the IHS study began in 2005, no metropolitan areas were extremely overvalued. There were 52 in 2005.
Homes in Miami-Dade County were deemed fairly valued, while those in Broward and Palm Beach counties were considered undervalued.
For the nation as a whole, the housing market is now slightly undervalued – 8.6 percent when weighted by market value and 10.1 percent when weighted by housing units, according to IHS.
“While the rate of decline has decreased throughout the year as the market began to stabilize,” said James Diffley, group managing director of IHS Global Insight's Regional Services Group, in a news release. "It's not at all clear that the market is on a recovery path."
Source: http://southflorida.bizjournals.com/southflorida/stories/2009/12/14/daily68.html
Wednesday, December 16, 2009
As mortgage rates sink, decide whether to buy now or wait
Interest rates on the benchmark 30-year, fixed-rate mortgage dipped to a 38-year low this week, giving consumers another reason to consider purchasing a home or refinancing their current one.
Freddie Mac said Thursday the average rate on a 30-year loan was 4.71 percent with an average 0.7 point, the lowest rate since the agency began its weekly tracking of long-term interest rates in 1971. A point is equal to 1 percent of the loan amount, payable as a lump sum at closing.
The decline wasn't overly dramatic. After all, the average rate in last week's survey was a still-stellar 4.78 percent, tying the previous all-time low set in June.
Still, the dip is likely to get people wondering whether it's time to sign on the dotted line.
QUESTION: Why are rates so low?
ANSWER: Since early January, the Federal Reserve has been purchasing mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae in an effort to stabilize the housing market by making homes more affordable for consumers. The Federal Reserve Bank of New York, which is managing the program, plans on purchasing $1.25 trillion of securities.
Q: Are rates expected stay this low?
A: It's hard to tell, but don't count on it because the lending landscape is likely to change next year. In September, the Fed said it would gradually wind down the purchase program, ending it by March 30. That has some in the mortgage lending industry worried.
In its weekly mortgage survey Thursday, more than 60 percent of Bankrate.com's panel of experts predicted that rates will move higher over the next 30 to 45 days. How much higher is anyone's guess. Last year at this time, the average 30-year, fixed-rate mortgage was 5.53 percent.
Q: Why do different mortgage surveys come up with different average interest rates?
A: It depends on which lenders are in their sample, when the survey was taken and whether the rates quoted are the posted rate, the application rate or the commitment rate. Also, some surveys take into account the points paid to secure the rate.
But regardless of the survey, the general consensus is that rates are ultra-low right now and may be the lowest the market will see.
Q: What else does a consumer need to know?
A: The lowest rates are offered to the most credit-worthy customers who can make sizable down payments. Shop not just for the interest rate and the points involved but also for the fees involved, which can vary widely from one lender to another.
If you're refinancing, remember the bigger the loan, the greater the payoff for finding a lower interest rate. Savvy customers put in their paperwork with a lender and set a "strike" interest rate at which to lock in the loan, a good move considering rate volatility.
Several refinancing calculators are available online that let borrowers plug in all the required numbers and determine the monthly savings and how long it will take to recoup the expense of a refinancing.
Q: So is now the best time to buy a home?
A: It depends on personal situations. Homebuyers certainly have a lot of factors working in their favor right now - low interest rates, plenty of marked-down homes for sale and an extended and expanded federal tax credit that will expire in the spring.
On the flip side, there's growing sentiment among analysts that housing prices, which are showing ever-so-minor improvement, may fall further. The reason? Lenders are expected to get better at determining which borrowers will qualify for loan modifications. That means lenders also will get faster at moving homes through the foreclosure process.
Mark Zandi, chief economist at Moody's Economy.com, earlier this week predicted that housing prices nationally will hit bottom in 2010's third quarter. That means anyone buying a house now could see the value of their investment initially depreciate.
Source: http://www.miamiherald.com/classifieds/real-estate/story/1365100.html
By MARY ELLEN PODMOLIK
Chicago Tribune
Freddie Mac said Thursday the average rate on a 30-year loan was 4.71 percent with an average 0.7 point, the lowest rate since the agency began its weekly tracking of long-term interest rates in 1971. A point is equal to 1 percent of the loan amount, payable as a lump sum at closing.
The decline wasn't overly dramatic. After all, the average rate in last week's survey was a still-stellar 4.78 percent, tying the previous all-time low set in June.
Still, the dip is likely to get people wondering whether it's time to sign on the dotted line.
QUESTION: Why are rates so low?
ANSWER: Since early January, the Federal Reserve has been purchasing mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae in an effort to stabilize the housing market by making homes more affordable for consumers. The Federal Reserve Bank of New York, which is managing the program, plans on purchasing $1.25 trillion of securities.
Q: Are rates expected stay this low?
A: It's hard to tell, but don't count on it because the lending landscape is likely to change next year. In September, the Fed said it would gradually wind down the purchase program, ending it by March 30. That has some in the mortgage lending industry worried.
In its weekly mortgage survey Thursday, more than 60 percent of Bankrate.com's panel of experts predicted that rates will move higher over the next 30 to 45 days. How much higher is anyone's guess. Last year at this time, the average 30-year, fixed-rate mortgage was 5.53 percent.
Q: Why do different mortgage surveys come up with different average interest rates?
A: It depends on which lenders are in their sample, when the survey was taken and whether the rates quoted are the posted rate, the application rate or the commitment rate. Also, some surveys take into account the points paid to secure the rate.
But regardless of the survey, the general consensus is that rates are ultra-low right now and may be the lowest the market will see.
Q: What else does a consumer need to know?
A: The lowest rates are offered to the most credit-worthy customers who can make sizable down payments. Shop not just for the interest rate and the points involved but also for the fees involved, which can vary widely from one lender to another.
If you're refinancing, remember the bigger the loan, the greater the payoff for finding a lower interest rate. Savvy customers put in their paperwork with a lender and set a "strike" interest rate at which to lock in the loan, a good move considering rate volatility.
Several refinancing calculators are available online that let borrowers plug in all the required numbers and determine the monthly savings and how long it will take to recoup the expense of a refinancing.
Q: So is now the best time to buy a home?
A: It depends on personal situations. Homebuyers certainly have a lot of factors working in their favor right now - low interest rates, plenty of marked-down homes for sale and an extended and expanded federal tax credit that will expire in the spring.
On the flip side, there's growing sentiment among analysts that housing prices, which are showing ever-so-minor improvement, may fall further. The reason? Lenders are expected to get better at determining which borrowers will qualify for loan modifications. That means lenders also will get faster at moving homes through the foreclosure process.
Mark Zandi, chief economist at Moody's Economy.com, earlier this week predicted that housing prices nationally will hit bottom in 2010's third quarter. That means anyone buying a house now could see the value of their investment initially depreciate.
Source: http://www.miamiherald.com/classifieds/real-estate/story/1365100.html
By MARY ELLEN PODMOLIK
Chicago Tribune
Monday, December 14, 2009
Flagler refinances $460M in properties
Flagler closed on a $460 million commercial mortgage-backed securities (CMBS) loan covering its 44 office and industrial properties in Florida.
The Coral Gables-based company, a subsidiary of Florida East Coast Industries, said this was the first nongovernment-supported CMBS issued in the past 18 months. Banc of America Securities helped Flagler securitize the loan.
“The execution of this financing, particularly in light of current market conditions, reflects the strength of Flagler’s real estate portfolio,” Flagler President and CEO Jose Hevia said in a news release. “This will further solidify our market leadership position throughout Florida.”
The company owns, manages, leases or has under development about 13 million square feet of office and industrial space in Florida. That includes the Village at Beacon Lakes in Doral, Office Depot’s headquarters in Boca Raton and Flagler Station in Miami.
Flagler has completed more than $1.9 billion of financing this year, the company said.
In October, Flagler removed “Development Group” from its name and launched a new Web site with a new corporate logo. And, last month, the company absorbed Fort Lauderdale’s Rowley Group. That company’s founder, Pike Rowley, became president of Flagler’s realty arm in the non-cash transaction.
Source: http://www.bizjournals.com/southflorida/stories/2009/12/14/daily2.html
The Coral Gables-based company, a subsidiary of Florida East Coast Industries, said this was the first nongovernment-supported CMBS issued in the past 18 months. Banc of America Securities helped Flagler securitize the loan.
“The execution of this financing, particularly in light of current market conditions, reflects the strength of Flagler’s real estate portfolio,” Flagler President and CEO Jose Hevia said in a news release. “This will further solidify our market leadership position throughout Florida.”
The company owns, manages, leases or has under development about 13 million square feet of office and industrial space in Florida. That includes the Village at Beacon Lakes in Doral, Office Depot’s headquarters in Boca Raton and Flagler Station in Miami.
Flagler has completed more than $1.9 billion of financing this year, the company said.
In October, Flagler removed “Development Group” from its name and launched a new Web site with a new corporate logo. And, last month, the company absorbed Fort Lauderdale’s Rowley Group. That company’s founder, Pike Rowley, became president of Flagler’s realty arm in the non-cash transaction.
Source: http://www.bizjournals.com/southflorida/stories/2009/12/14/daily2.html
Friday, December 11, 2009
S. Fla. is No. 4 for home loan modifications
South Florida ranked fourth in the nation for home loan modifications, with 34,860 through November under President Barack Obama’s Making Home Affordable Program.
Nationwide, 24 percent of the nation’s 3.3 million homes with troubled loans have been modified, according to a U.S. Department of the Treasury report issued Thursday.
The program, which allows homeowners the ability to lower their mortgage rates, has saved them an estimated $150 a month, on average – more than $6 billion in the first year, according to the report.
Seventy-eight loan servicers have signed agreements to modify loans under the program.
Although many start the process, few actually take the modifications to completion. For example, West Palm Beach-based Ocwen Financial Corp., which entered the program in April, has 66, 351 loans that are 60 days or more late. Of them, 15,961 were offered modifications, 5,515 were in the process of being modified and just 4,252 (15 percent) have been modified.
Nationwide, of the 728,408 loans modified, only 31,382 have become permanent.
"Our focus now is on working with servicers, borrowers and organizations to get as many of those eligible homeowners as possible into permanent modifications,” said Phyllis Caldwell, chief of Treasury’s Homeownership Preservation Office.
On Tuesday, Condo Vultures reported that more than 7,000 foreclosure actions were filed last month in Miami-Dade, Broward and Palm Beach counties.
Also on Tuesday, Florida snagged the No. 2 spot from California, posting the nation’s second-highest foreclosure rate in November, according to RealtyTrac.
And, on Wednesday, Zillow reported South Florida ranked among the five markets in the country with the biggest home value losses – down $45.9 billion in 2009.
Source: http://southflorida.bizjournals.com/southflorida/stories/2009/12/07/daily44.html
Nationwide, 24 percent of the nation’s 3.3 million homes with troubled loans have been modified, according to a U.S. Department of the Treasury report issued Thursday.
The program, which allows homeowners the ability to lower their mortgage rates, has saved them an estimated $150 a month, on average – more than $6 billion in the first year, according to the report.
Seventy-eight loan servicers have signed agreements to modify loans under the program.
Although many start the process, few actually take the modifications to completion. For example, West Palm Beach-based Ocwen Financial Corp., which entered the program in April, has 66, 351 loans that are 60 days or more late. Of them, 15,961 were offered modifications, 5,515 were in the process of being modified and just 4,252 (15 percent) have been modified.
Nationwide, of the 728,408 loans modified, only 31,382 have become permanent.
"Our focus now is on working with servicers, borrowers and organizations to get as many of those eligible homeowners as possible into permanent modifications,” said Phyllis Caldwell, chief of Treasury’s Homeownership Preservation Office.
On Tuesday, Condo Vultures reported that more than 7,000 foreclosure actions were filed last month in Miami-Dade, Broward and Palm Beach counties.
Also on Tuesday, Florida snagged the No. 2 spot from California, posting the nation’s second-highest foreclosure rate in November, according to RealtyTrac.
And, on Wednesday, Zillow reported South Florida ranked among the five markets in the country with the biggest home value losses – down $45.9 billion in 2009.
Source: http://southflorida.bizjournals.com/southflorida/stories/2009/12/07/daily44.html
Wednesday, December 9, 2009
Finally, an end to the sharp drop in home values
Zillow, the real estate home-price research company, says the value of residential real estate ended its sickening drop in 2009. The firm's chief economist writes: "Total home values in the United States fell $489 billion in the first 11 months of 2009. A large drop, to be sure, but it marks a significant improvement from 2008, when homes lost a total of $3.6 trillion in values." Zillow says residential real estate values actually rose in 48 of the 154 markets it tracks.
The largest gains were in Providence, Boston and Denver. But markets including Los Angeles, Chicago and New York City were still in trouble, based on data from January through November. Zillow speculates that low mortgage rates and government assistance programs are helping real estate values.
What Zillow didn't do was post any predictions for next year. Values in 2010 could begin to drop sharply again for a number of reasons: There has been some pressure on the Fed to raise interest rates if bubbles form in the equities or commodities sectors. Increased borrowing by sovereign governments, especially the U.S., could also push rates higher as the demand for capital spikes sharply.
A number of "interest only" mortgages will reset in the next two years, and that could push up default rates as monthly payments on this type of home loan rise. Increasing unemployment could also drive up the number of people who cannot afford to stay in their homes.
So far, the government's program to modify monthly mortgage payments for people with financial difficulties has permanently extended to less than 1 million people. Defaults among homeowners in the trial portion of this federal program are high, perhaps because people with "underwater" mortgages don't have much financial incentive to own their homes in the long term.
The data on an improving residential real estate market may mask problems in the coming year.
Source:
http://www.dailyfinance.com/2009/12/09/finally-an-end-to-the-sharp-drop-in-home-values/
Douglas A. McIntyre is an editor at 24/7 Wall St.
The largest gains were in Providence, Boston and Denver. But markets including Los Angeles, Chicago and New York City were still in trouble, based on data from January through November. Zillow speculates that low mortgage rates and government assistance programs are helping real estate values.
What Zillow didn't do was post any predictions for next year. Values in 2010 could begin to drop sharply again for a number of reasons: There has been some pressure on the Fed to raise interest rates if bubbles form in the equities or commodities sectors. Increased borrowing by sovereign governments, especially the U.S., could also push rates higher as the demand for capital spikes sharply.
A number of "interest only" mortgages will reset in the next two years, and that could push up default rates as monthly payments on this type of home loan rise. Increasing unemployment could also drive up the number of people who cannot afford to stay in their homes.
So far, the government's program to modify monthly mortgage payments for people with financial difficulties has permanently extended to less than 1 million people. Defaults among homeowners in the trial portion of this federal program are high, perhaps because people with "underwater" mortgages don't have much financial incentive to own their homes in the long term.
The data on an improving residential real estate market may mask problems in the coming year.
Source:
http://www.dailyfinance.com/2009/12/09/finally-an-end-to-the-sharp-drop-in-home-values/
Douglas A. McIntyre is an editor at 24/7 Wall St.
Monday, December 7, 2009
LWR firm bids $61 million for home lots in Florida
LAKEWOOD RANCH — A Lakewood Ranch residential development firm is a leading bidder for the assets of bankrupt homebuilder Tousa.
Starwood Land Ventures, LLC has put in a $61 million offer to purchase 5,499 of Tousa’s unstarted home lots in Florida, according to documents in U.S. Bankruptcy Court in Fort Lauderdale.
The court says Tousa received four other offers for the Florida assets but the homebuilder and Starwood entered into a non-binding letter of intent in July.
Jon Rapaport, president for Starwood’s Southeast Florida division, declined to comment on the firm’s intent to purchase Tousa’s property.
An auction is scheduled for Jan. 22 in Miami for all qualified bidders.
Tousa filed for bankruptcy in January 2008. The homebuilder has developments in Florida, Tennessee, Texas, Colorado, Arizona and Nevada.
Tousa was involved in designing, building, and marketing single-family residences, town homes, and condominiums. It also provided financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Co. and Universal Land Title, Inc.
Tousa’s predecessor company was founded in Houston, Texas in 1983 as Newmark Homes Corp. In December 1999, Tousa acquired 80 percent of Newmark’s stock.
Tousa also acquired 100 percent of then-public Engle Holdings Corp. in November 2000. On June 25, 2002, Engle merged with Newmark, and the merged company changed its name to Tousa, Inc.
Starwood Land Ventures, a residential real estate and investment firm, merged with a Dallas residential land development firm Taylor-Duncan Interests Inc. in April.
At the time Larry Taylor, president of Taylor-Duncan, said the newly merged company would focus on developing home sites and other single-family residential properties in Dallas-Fort Worth. Starwood Land Ventures is a controlled affiliate of Starwood Capital Group Global LLC, based in Greenwich, Conn. Starwood Capital is a privately-held, global real estate investment firm that specializes in real estate-related investments in commercial and residential developments. Starwood and its affiliates have invested about $6 billion of equity capital in transactions with more than $30 billion in assets.
Starwood Land Ventures, LLC has put in a $61 million offer to purchase 5,499 of Tousa’s unstarted home lots in Florida, according to documents in U.S. Bankruptcy Court in Fort Lauderdale.
The court says Tousa received four other offers for the Florida assets but the homebuilder and Starwood entered into a non-binding letter of intent in July.
Jon Rapaport, president for Starwood’s Southeast Florida division, declined to comment on the firm’s intent to purchase Tousa’s property.
An auction is scheduled for Jan. 22 in Miami for all qualified bidders.
Tousa filed for bankruptcy in January 2008. The homebuilder has developments in Florida, Tennessee, Texas, Colorado, Arizona and Nevada.
Tousa was involved in designing, building, and marketing single-family residences, town homes, and condominiums. It also provided financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Co. and Universal Land Title, Inc.
Tousa’s predecessor company was founded in Houston, Texas in 1983 as Newmark Homes Corp. In December 1999, Tousa acquired 80 percent of Newmark’s stock.
Tousa also acquired 100 percent of then-public Engle Holdings Corp. in November 2000. On June 25, 2002, Engle merged with Newmark, and the merged company changed its name to Tousa, Inc.
Starwood Land Ventures, a residential real estate and investment firm, merged with a Dallas residential land development firm Taylor-Duncan Interests Inc. in April.
At the time Larry Taylor, president of Taylor-Duncan, said the newly merged company would focus on developing home sites and other single-family residential properties in Dallas-Fort Worth. Starwood Land Ventures is a controlled affiliate of Starwood Capital Group Global LLC, based in Greenwich, Conn. Starwood Capital is a privately-held, global real estate investment firm that specializes in real estate-related investments in commercial and residential developments. Starwood and its affiliates have invested about $6 billion of equity capital in transactions with more than $30 billion in assets.
Friday, December 4, 2009
Mortgage rates hit rock bottom in South Florida
Mortgage interest rates have dropped to an all-time low, which experts say could cheer the depressed South Florida housing market.
The average for a 30-year fixed-rate mortgage fell to 4.71, Freddie Mac, the federally run mortgage finance company, reported Thursday. That's the lowest recorded since Freddie Mac first started weekly mortgage rate surveys in 1971. Rates dropped 0.07 percent since last week.
For prospective homebuyers, "The sharp drop in home prices, tax credits and now record low mortgage rates put a lot of affordability in your quarter," said Greg McBride, a senior financial analyst at Bankrate.com in North Palm Beach.
But low rates won't cure all of the housing market's ills. The rates won't resolve the extremely low prices home sellers are getting, as they put their homes on a market crowded with foreclosures and short sales. And they can't counteract the impact of high unemployment, which economists say is a primary reason people are losing their homes.
Low rates may also be out of reach for borrowers who are deeply underwater – meaning they owe more on the mortgage than the home is worth. Only those who are slightly underwater can qualify to refinance a home loan and take advantage of lower rates. About half of South Florida's homeowners are underwater to some degree, according to statistics from First American Core Logic, a real estate analysis firm.
Still, the ray of hope provided by low mortgage rates is the possibility they'll hasten the market's recovery, which is still at least a year away, according to Moody's Economy.com.
"If mortgage rates remain this low for an extended period of time it could speed up the degree to which we work off excess [housing] inventory," said economist Chris Lafakis who tracks Florida's economy at Moody's Economy.com.
The Moody's Economy.com forecast calls for Florida home prices statewide to fall throughout 2010, for a total decline next year of 21 percent, before stabilizing in 2011. Some areas will be hit even harder. For Miami, Moody's foresees a price decline next year of 28 percent and stability to come six months afterward, in mid-2011.
The bright spot in the housing picture is that homes with these low price tags are selling. In Fort Lauderdale, the number of units sold has been higher than last year for nine straight months, said Richard Barkette, chief executive officer of the Realtor Association of Greater Fort Lauderdale. The Realtor Association of Palm Beach said that the number of condos sold in November was 21 percent higher than the year before and single family home sales were up 44 percent from November, 2008.
Low rates "will induce a wider array of buyers to qualify," for home mortgages, Barkette said.
The Federal Reserve is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates, but that money is set to run out next spring. The goal of the program is to make home buying more affordable and prop up the housing market.
McBride said he expects mortgage interest rates to remain at this extremely low level low only until the end of the year, when rates may start climbing again.
For homebuyers, this week's rate drop is a second chance to grab a deal. Mortgage interest rates were nearly this low back in April, when twice the average for 30-year mortgages touched 4.78 percent, before heading up to as high as 5.6 percent in June.
The Associated Press contributed material to this report. Harriet Johnson Brackey can be reached at hjbrackey@sunsentinel.com or 954-356-4614.
The average for a 30-year fixed-rate mortgage fell to 4.71, Freddie Mac, the federally run mortgage finance company, reported Thursday. That's the lowest recorded since Freddie Mac first started weekly mortgage rate surveys in 1971. Rates dropped 0.07 percent since last week.
For prospective homebuyers, "The sharp drop in home prices, tax credits and now record low mortgage rates put a lot of affordability in your quarter," said Greg McBride, a senior financial analyst at Bankrate.com in North Palm Beach.
But low rates won't cure all of the housing market's ills. The rates won't resolve the extremely low prices home sellers are getting, as they put their homes on a market crowded with foreclosures and short sales. And they can't counteract the impact of high unemployment, which economists say is a primary reason people are losing their homes.
Low rates may also be out of reach for borrowers who are deeply underwater – meaning they owe more on the mortgage than the home is worth. Only those who are slightly underwater can qualify to refinance a home loan and take advantage of lower rates. About half of South Florida's homeowners are underwater to some degree, according to statistics from First American Core Logic, a real estate analysis firm.
Still, the ray of hope provided by low mortgage rates is the possibility they'll hasten the market's recovery, which is still at least a year away, according to Moody's Economy.com.
"If mortgage rates remain this low for an extended period of time it could speed up the degree to which we work off excess [housing] inventory," said economist Chris Lafakis who tracks Florida's economy at Moody's Economy.com.
The Moody's Economy.com forecast calls for Florida home prices statewide to fall throughout 2010, for a total decline next year of 21 percent, before stabilizing in 2011. Some areas will be hit even harder. For Miami, Moody's foresees a price decline next year of 28 percent and stability to come six months afterward, in mid-2011.
The bright spot in the housing picture is that homes with these low price tags are selling. In Fort Lauderdale, the number of units sold has been higher than last year for nine straight months, said Richard Barkette, chief executive officer of the Realtor Association of Greater Fort Lauderdale. The Realtor Association of Palm Beach said that the number of condos sold in November was 21 percent higher than the year before and single family home sales were up 44 percent from November, 2008.
Low rates "will induce a wider array of buyers to qualify," for home mortgages, Barkette said.
The Federal Reserve is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates, but that money is set to run out next spring. The goal of the program is to make home buying more affordable and prop up the housing market.
McBride said he expects mortgage interest rates to remain at this extremely low level low only until the end of the year, when rates may start climbing again.
For homebuyers, this week's rate drop is a second chance to grab a deal. Mortgage interest rates were nearly this low back in April, when twice the average for 30-year mortgages touched 4.78 percent, before heading up to as high as 5.6 percent in June.
The Associated Press contributed material to this report. Harriet Johnson Brackey can be reached at hjbrackey@sunsentinel.com or 954-356-4614.
Thursday, December 3, 2009
Real Estate Outlook: Real Estate Market Is Active
This week it's all about sales. They're up in all four major regions of the country, and we're even seeing bidding wars breaking in some scattered markets, according to the latest survey from the National Association of Realtors.
Sales of single family homes, townhouses, condos and co-ops surged by a little over 10 percent in October, and were 24 percent above where they were a year before.
Closed transactions rose by nearly 12 percent in the Northeast, 14. 4 percent in the Midwest, 12.7 percent in the South and by 1.6 percent in the West.
Why the big jump in activity? The number one reason, according to Dr. Lawrence Yun chief economist for the National Association of Realtors, was that first time buyers rushed to wrap up deals before the scheduled November 30th original expiration date of the $8,000 federal tax credit
That program has now been extended through next June 30th.
Another factor: The near record-breaking affordability of housing - as measured by the prices of homes in local markets around the U.S. compared with household incomes and monthly payments at current mortgage interest rates.
The affordability equation is now at its most favorable point for buyers since 1970. Interest rates for 30-year fixed loans have been hovering around five percent for weeks -- and recently dropped below that into the upper four percent range. A year ago, by comparison, the average 30-year rate was 6.2 percent.
House prices meanwhile have remained well below where they were a year ago -- down by 7 percent to a median price of about $173,000. In the southwestern states, Florida and the suburbs of Washington D.C., low prices, especially for entry-level houses, are triggering multiple-bid situations -- something that hasn't been seen since the heady days of the housing boom in 2004 and 2005.
The Realtors' Yun warns, though, that encouraging though this may appear, the market is not static and some of these dynamics could change in the months ahead.
Prices are flattening out and could even move up surprisingly in some areas in the coming months, if the economy cooperates. Interest rates could rise next Spring if the Federal Reserve phases out its program of heavy-duty investing in mortgage securities, as it says it plans to do.
In the meantime, inventory levels of unsold houses continue to drop ... and are now down to just a seven month supply nationwide on average. Since a six month supply is considered to be a balanced market, favoring neither sellers nor buyers, it looks like we're not too far off.
Source: Kenneth R. Harney http://realtytimes.com/rtpages/20091201_realestateoutlook.htm
Sales of single family homes, townhouses, condos and co-ops surged by a little over 10 percent in October, and were 24 percent above where they were a year before.
Closed transactions rose by nearly 12 percent in the Northeast, 14. 4 percent in the Midwest, 12.7 percent in the South and by 1.6 percent in the West.
Why the big jump in activity? The number one reason, according to Dr. Lawrence Yun chief economist for the National Association of Realtors, was that first time buyers rushed to wrap up deals before the scheduled November 30th original expiration date of the $8,000 federal tax credit
That program has now been extended through next June 30th.
Another factor: The near record-breaking affordability of housing - as measured by the prices of homes in local markets around the U.S. compared with household incomes and monthly payments at current mortgage interest rates.
The affordability equation is now at its most favorable point for buyers since 1970. Interest rates for 30-year fixed loans have been hovering around five percent for weeks -- and recently dropped below that into the upper four percent range. A year ago, by comparison, the average 30-year rate was 6.2 percent.
House prices meanwhile have remained well below where they were a year ago -- down by 7 percent to a median price of about $173,000. In the southwestern states, Florida and the suburbs of Washington D.C., low prices, especially for entry-level houses, are triggering multiple-bid situations -- something that hasn't been seen since the heady days of the housing boom in 2004 and 2005.
The Realtors' Yun warns, though, that encouraging though this may appear, the market is not static and some of these dynamics could change in the months ahead.
Prices are flattening out and could even move up surprisingly in some areas in the coming months, if the economy cooperates. Interest rates could rise next Spring if the Federal Reserve phases out its program of heavy-duty investing in mortgage securities, as it says it plans to do.
In the meantime, inventory levels of unsold houses continue to drop ... and are now down to just a seven month supply nationwide on average. Since a six month supply is considered to be a balanced market, favoring neither sellers nor buyers, it looks like we're not too far off.
Source: Kenneth R. Harney http://realtytimes.com/rtpages/20091201_realestateoutlook.htm
Wednesday, December 2, 2009
South Florida, statewide home sales rise
Existing home sales rose both in Florida and nationwide as the housing market continues to show signs of stabilization.
Statewide, year-over-year existing home sales shot up 45 percent last month, with a total of 15,160 homes sold, up from 10,444 homes sold in October 2008, according to Florida Realtors.
Between September and October, existing home sales increased 5.1 percent.
Florida's median sales price for existing homes last month was $140,300, down 17 percent from a year ago, when it was $169,700.
Sales of existing single-family homes in West Palm Beach rose the most in the tri-county area – up 36 percent, to 841 from 618. The median sales price also fell the least – down just 8 percent, to $243,600 from $264,600.
Existing home sales in Fort Lauderdale rose 32 percent in October, to 826 from 625 a year ago. The median sales price slid 16 percent, to $211,600 from $252,500.
Sales in Miami grew the least – up 26 percent, to 571 from 453 – while prices fell the most – down 28 percent, to $178,500 from $246,800.
Statewide existing condo sales rose to 5,398 in October, up 82 percent from 2,958 a year prior and up 6.1 percent over September. The median sales price of an existing condo in Florida fell 29 percent, to $105,200 in October from $147,900 a year ago.
Fort Lauderdale saw the biggest increase in sales of existing condo sales in the tri-county area in October – up 68 percent, to 926 from 551 a year ago. The median price fell 28 percent, to $83,200 from $115,200. West Palm Beach recorded a 59 percent hike in existing condo sales, to 766 from 481. The median price fell 20 percent, to $109,300 from $135,800. And in Miami, existing condo sales rose 47 percent, to 647 in October from 439 in the year-ago period. The median sales price of a condo in Miami fell 30 percent to $138,400 from $197,400.
Nationwide, exiting home sales in October jumped a record 10.1 percent as buyers continued to take advantage of the first-time homebuyers credit.
Patrick Newport, U.S. economist with IHS Global Insight, suggested in a news release that “sales will drop in the first quarter of 2010, payback from the first tax credit. Sales will take a second hit in the third quarter of 2010, payback from the second tax credit. Overall, sales in 2010 will be about the same as in 2009.”
Source: http://southflorida.bizjournals.com/southflorida/stories/2009/11/23/daily5.html
Statewide, year-over-year existing home sales shot up 45 percent last month, with a total of 15,160 homes sold, up from 10,444 homes sold in October 2008, according to Florida Realtors.
Between September and October, existing home sales increased 5.1 percent.
Florida's median sales price for existing homes last month was $140,300, down 17 percent from a year ago, when it was $169,700.
Sales of existing single-family homes in West Palm Beach rose the most in the tri-county area – up 36 percent, to 841 from 618. The median sales price also fell the least – down just 8 percent, to $243,600 from $264,600.
Existing home sales in Fort Lauderdale rose 32 percent in October, to 826 from 625 a year ago. The median sales price slid 16 percent, to $211,600 from $252,500.
Sales in Miami grew the least – up 26 percent, to 571 from 453 – while prices fell the most – down 28 percent, to $178,500 from $246,800.
Statewide existing condo sales rose to 5,398 in October, up 82 percent from 2,958 a year prior and up 6.1 percent over September. The median sales price of an existing condo in Florida fell 29 percent, to $105,200 in October from $147,900 a year ago.
Fort Lauderdale saw the biggest increase in sales of existing condo sales in the tri-county area in October – up 68 percent, to 926 from 551 a year ago. The median price fell 28 percent, to $83,200 from $115,200. West Palm Beach recorded a 59 percent hike in existing condo sales, to 766 from 481. The median price fell 20 percent, to $109,300 from $135,800. And in Miami, existing condo sales rose 47 percent, to 647 in October from 439 in the year-ago period. The median sales price of a condo in Miami fell 30 percent to $138,400 from $197,400.
Nationwide, exiting home sales in October jumped a record 10.1 percent as buyers continued to take advantage of the first-time homebuyers credit.
Patrick Newport, U.S. economist with IHS Global Insight, suggested in a news release that “sales will drop in the first quarter of 2010, payback from the first tax credit. Sales will take a second hit in the third quarter of 2010, payback from the second tax credit. Overall, sales in 2010 will be about the same as in 2009.”
Source: http://southflorida.bizjournals.com/southflorida/stories/2009/11/23/daily5.html
Monday, November 30, 2009
Consumers are more conscientious about healthy
Consumers are more conscientious about healthy living than ever before and this awareness is making its way to the homebuilding industry, particularly in the custom home market, says Michael Lenahen who owns Ponte Vedra, Fla.-based Aurora Custom Homes.
“As more consumers begin to realize how much their home affects every aspect of their health, they are beginning to see the importance of improving its environmental quality with products to benefit their health and that of their family,” Lenahen said. “The new emphasis toward healthy living focuses around four main categories – air, water, odor/fumes and lighting.”
According to the U.S. Green Building Council, pollutants are often two to five times higher indoors than outdoors and this can significantly affect air in the home causing breathing problems and respiratory diseases. When it comes to the quality of the air, Lenahen said several products are available on the market that homeowners should incorporate into their home such as:
-Advanced allergy filters to control dust particles and pollutants
-Dehumidification devices to manage the humidity in the home
-Variable speed air handlers to maintain the circulation of air throughout the home and ventilation fans to introduce fresh air into the home while removing stale, humid air
Improving the water quality in a home is just as important as the air quality, Lenahen said. Several products are available to improve the quality and efficiency of a home’s water flow and usage, including:
-Carbon filter and reverse osmosis units to purify drinking water by removing particulate matter and harmful minerals
-Whole-house water softeners to remove calcium and other harmful minerals while providing added benefit to the home’s appliances and pluming fixtures. Water softeners also improve skin tone and texture by removing calcium, magnesium and iron from the water.
-Underground cisterns to collect rainwater from the gutter and downspouts to use for irrigating the lawn and landscapeHealthy home living is also improved by the use of low Volatile Organic Compound (VOC) materials, which emit lower levels of gasses into the home from everyday materials such as paints, sealants, cabinets and flooring materials. Lenahen said homeowners should use the lowest emitting VOC products for custom homebuilding and remodeling projects, thereby reducing the negative health impact the products may have on the occupants. Low VOC products will have labeling to help homeowners find the healthiest option.
Better lighting solutions can also foster healthier living. Traditional light fixtures typically include high wattage bulbs, which waste electricity while adding excessive heat into the home. Suggested improvements include:
-Decorative light fixtures with less wattage requirements and soft-light emitting globes
-Compact florescent light (CFL) bulbs or L.E.D. fixtures and bulbs for longer life usage
-Next generation skylights, such as Velux Sun Tunnel or Solatube, that bring natural light into the home, reducing the need for artificial light and energy consumption
“These are just some of the many changes that can be made to current homes or built into new homes that will greatly improve the quality of life and health of its occupants,” Lenahen said. “The more consumers become aware of the positive affects of healthy living within the home, the more products will enter the mainstream of standard building practices.”
About Aurora Custom Homes
Aurora Custom Homes was founded in 1997 by Michael Lenahen with a mission to build custom homes of uncompromised elegance. Driven by passion and purpose, Aurora Custom Homes provides its clients with a truly custom building experience where the customer becomes an integral part of the building team.
For more information, visit www.AuroraBuilders.com.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Read more: http://rismedia.com/2009-11-29/9-home-improvements-to-promote-healthy-living-in-your-home/#ixzz0YMdrUjWk
“As more consumers begin to realize how much their home affects every aspect of their health, they are beginning to see the importance of improving its environmental quality with products to benefit their health and that of their family,” Lenahen said. “The new emphasis toward healthy living focuses around four main categories – air, water, odor/fumes and lighting.”
According to the U.S. Green Building Council, pollutants are often two to five times higher indoors than outdoors and this can significantly affect air in the home causing breathing problems and respiratory diseases. When it comes to the quality of the air, Lenahen said several products are available on the market that homeowners should incorporate into their home such as:
-Advanced allergy filters to control dust particles and pollutants
-Dehumidification devices to manage the humidity in the home
-Variable speed air handlers to maintain the circulation of air throughout the home and ventilation fans to introduce fresh air into the home while removing stale, humid air
Improving the water quality in a home is just as important as the air quality, Lenahen said. Several products are available to improve the quality and efficiency of a home’s water flow and usage, including:
-Carbon filter and reverse osmosis units to purify drinking water by removing particulate matter and harmful minerals
-Whole-house water softeners to remove calcium and other harmful minerals while providing added benefit to the home’s appliances and pluming fixtures. Water softeners also improve skin tone and texture by removing calcium, magnesium and iron from the water.
-Underground cisterns to collect rainwater from the gutter and downspouts to use for irrigating the lawn and landscapeHealthy home living is also improved by the use of low Volatile Organic Compound (VOC) materials, which emit lower levels of gasses into the home from everyday materials such as paints, sealants, cabinets and flooring materials. Lenahen said homeowners should use the lowest emitting VOC products for custom homebuilding and remodeling projects, thereby reducing the negative health impact the products may have on the occupants. Low VOC products will have labeling to help homeowners find the healthiest option.
Better lighting solutions can also foster healthier living. Traditional light fixtures typically include high wattage bulbs, which waste electricity while adding excessive heat into the home. Suggested improvements include:
-Decorative light fixtures with less wattage requirements and soft-light emitting globes
-Compact florescent light (CFL) bulbs or L.E.D. fixtures and bulbs for longer life usage
-Next generation skylights, such as Velux Sun Tunnel or Solatube, that bring natural light into the home, reducing the need for artificial light and energy consumption
“These are just some of the many changes that can be made to current homes or built into new homes that will greatly improve the quality of life and health of its occupants,” Lenahen said. “The more consumers become aware of the positive affects of healthy living within the home, the more products will enter the mainstream of standard building practices.”
About Aurora Custom Homes
Aurora Custom Homes was founded in 1997 by Michael Lenahen with a mission to build custom homes of uncompromised elegance. Driven by passion and purpose, Aurora Custom Homes provides its clients with a truly custom building experience where the customer becomes an integral part of the building team.
For more information, visit www.AuroraBuilders.com.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Read more: http://rismedia.com/2009-11-29/9-home-improvements-to-promote-healthy-living-in-your-home/#ixzz0YMdrUjWk
Friday, November 27, 2009
Q&A clears the air about homebuyer tax credits
If you’re in the market for a home, the world is your oyster. Interest rates are at record lows. Housing prices in many parts of the country are still depressed. And you may be eligible for a generous tax break, even if the home you buy isn’t your first.
On Nov. 6, President Obama signed legislation that provides a $6,500 tax credit for some current homeowners who buy another home. The law also extends the $8,000 tax credit for first-time homebuyers, scheduled to expire Nov. 30, until next spring.
A lot of people are interested in taking advantage of this tax break, but the expanded credit also has whipped up a lot of confusion. Here are some answers to frequently asked questions:
Q: How do I qualify for the $6,500 credit?
A: This credit is available for homebuyers who sign a binding contract on a new or existing home by April 30, 2010, and settle by July 1 (deadlines that also apply to the first-time homebuyer credit). You must have lived in your existing home for five consecutive years out of the last eight. The home you purchase must be your primary residence. However, the law doesn’t require you to sell your old home, says Bob Meighan, vice president at TurboTax, the tax software provider. You can use it as a second home or a rental and still claim the credit, he says.
Q: I sold a home I had lived in for more than five years and bought a new one in August. Do I qualify for a tax credit?
A: No. For existing homeowners, the $6,500 credit is limited to homes purchased after Nov. 6.
Q: Does the home I buy have to be more expensive than the one I own now?
A: No. While the real estate industry is hopeful that homeowners will use this credit to buy a nicer place, there’s no prohibition against using it to downsize, Meighan says. That makes this credit particularly useful for seniors who are interested in moving into a smaller home.
If you are planning to move up, keep in mind that you can’t claim the credit if the purchase price of the home exceeds $800,000. Unlike some other tax credits, this one doesn’t slowly phase out once you exceed the threshold, Meighan says. If you buy a home for more than $800,000 – and that refers to the purchase price, not the assessed value or the amount of your mortgage – you are ineligible for the credit, period.
The $800,000 cap also applies to first-time homebuyers, but only those who purchase a home after Nov. 6. First-time homebuyers who bought a home for more than $800,000 between Jan. 1 and Nov. 6 can still claim the credit, assuming they meet the other criteria, Meighan says.
Q: I’m an existing homeowner, and would like to build a new home. Can I claim the credit?
A: Yes, but make sure your builder is good at meeting deadlines. You can claim the credit as long as you have a binding contract in place by April 30 and close by July 1. In the case of a new home, the closing date is the day you move in, Meighan says. If your home isn’t habitable by June 30, you won’t be able to claim the credit, he says.
Q: I bought a home in 2008 and claimed the old $7,500 first-time homebuyers credit, which must be repaid over 15 years. Did the new law change that rule?
A: No. That credit, which was available for homes purchased between April 9, 2008, and Dec. 31, 2008, must still be repaid.
The $8,000 first-time homebuyer credit, available for homes purchased after Dec. 31, 2008, doesn’t have to be repaid as long as you remain in the home for at least three years. Existing homeowners who qualify for the $6,500 credit don’t have to repay that money, either, as long as they meet the three-year requirement.
Q: We have a rental home and would like to sell it to our son, who has never owned a home. Would he qualify for the first-time homebuyer credit?
A: No. The legislation specifically prohibits taxpayers from claiming the credit if the sale is between “related parties,” Meighan says. A home sale to a parent, grandparent, child or grandchild would fall into that category.
Q: I sold my home this year and have been renting since. If I buy a new home, do I qualify for the expanded credit?
A: Yes, as long as you meet all of the other requirements, says Mel Schwarz, partner with Grant Thornton in Washington, D.C. The eight-year period used to determine eligibility ends on the day you buy your new home, he says.
Copyright © 2009 USA TODAY. All rights reserved.
Source: http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=227710
On Nov. 6, President Obama signed legislation that provides a $6,500 tax credit for some current homeowners who buy another home. The law also extends the $8,000 tax credit for first-time homebuyers, scheduled to expire Nov. 30, until next spring.
A lot of people are interested in taking advantage of this tax break, but the expanded credit also has whipped up a lot of confusion. Here are some answers to frequently asked questions:
Q: How do I qualify for the $6,500 credit?
A: This credit is available for homebuyers who sign a binding contract on a new or existing home by April 30, 2010, and settle by July 1 (deadlines that also apply to the first-time homebuyer credit). You must have lived in your existing home for five consecutive years out of the last eight. The home you purchase must be your primary residence. However, the law doesn’t require you to sell your old home, says Bob Meighan, vice president at TurboTax, the tax software provider. You can use it as a second home or a rental and still claim the credit, he says.
Q: I sold a home I had lived in for more than five years and bought a new one in August. Do I qualify for a tax credit?
A: No. For existing homeowners, the $6,500 credit is limited to homes purchased after Nov. 6.
Q: Does the home I buy have to be more expensive than the one I own now?
A: No. While the real estate industry is hopeful that homeowners will use this credit to buy a nicer place, there’s no prohibition against using it to downsize, Meighan says. That makes this credit particularly useful for seniors who are interested in moving into a smaller home.
If you are planning to move up, keep in mind that you can’t claim the credit if the purchase price of the home exceeds $800,000. Unlike some other tax credits, this one doesn’t slowly phase out once you exceed the threshold, Meighan says. If you buy a home for more than $800,000 – and that refers to the purchase price, not the assessed value or the amount of your mortgage – you are ineligible for the credit, period.
The $800,000 cap also applies to first-time homebuyers, but only those who purchase a home after Nov. 6. First-time homebuyers who bought a home for more than $800,000 between Jan. 1 and Nov. 6 can still claim the credit, assuming they meet the other criteria, Meighan says.
Q: I’m an existing homeowner, and would like to build a new home. Can I claim the credit?
A: Yes, but make sure your builder is good at meeting deadlines. You can claim the credit as long as you have a binding contract in place by April 30 and close by July 1. In the case of a new home, the closing date is the day you move in, Meighan says. If your home isn’t habitable by June 30, you won’t be able to claim the credit, he says.
Q: I bought a home in 2008 and claimed the old $7,500 first-time homebuyers credit, which must be repaid over 15 years. Did the new law change that rule?
A: No. That credit, which was available for homes purchased between April 9, 2008, and Dec. 31, 2008, must still be repaid.
The $8,000 first-time homebuyer credit, available for homes purchased after Dec. 31, 2008, doesn’t have to be repaid as long as you remain in the home for at least three years. Existing homeowners who qualify for the $6,500 credit don’t have to repay that money, either, as long as they meet the three-year requirement.
Q: We have a rental home and would like to sell it to our son, who has never owned a home. Would he qualify for the first-time homebuyer credit?
A: No. The legislation specifically prohibits taxpayers from claiming the credit if the sale is between “related parties,” Meighan says. A home sale to a parent, grandparent, child or grandchild would fall into that category.
Q: I sold my home this year and have been renting since. If I buy a new home, do I qualify for the expanded credit?
A: Yes, as long as you meet all of the other requirements, says Mel Schwarz, partner with Grant Thornton in Washington, D.C. The eight-year period used to determine eligibility ends on the day you buy your new home, he says.
Copyright © 2009 USA TODAY. All rights reserved.
Source: http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=227710
Wednesday, November 25, 2009
The upside of Florida real estate: 15 market positives
1. Great prices. Statewide, home prices have fallen about 20 percent in the past year. Florida Association of Realtors® statistics show the existing-home median sales price was $185,400 in the third quarter of 2008, compared with $233,200 in third quarter 2007. By the way, those numbers are still significantly higher than in the early years of the decade. In 2003, the third-quarter sales price was $163,700, which reflects an increase of about 13.3 percent over the five-year period. (The median is a typical market price where half the homes sold for more, half for less.)
2. The time is right. Home sales volumes are rising again -- a signal that the market recovery may be underway. In third quarter 2008, statewide sales of existing single-family homes were up 5 percent compared to the same period last year, according to FAR statistics.
3. High inventory levels. Conditions are ideal for buyers to find their dream home. Inventory is plentiful in all price ranges. But as sales volumes increase, inventory levels are likely to shrink. That reality translates into this advice for buyers: Don't wait too long.
4. Low mortgage rates. Mortgage rates are still at the lowest levels since the 1960s. Lower rates multiply a buyer's financial power. Even half a percent can make a sizeable difference. For example, on a $200,000 home, half of 1 percent could save the homeowner about $815 a year. Buyers can get more home for the money, which is a perfect scenario for families looking to upsize.
5. Incentives to buy. Federal, state and local housing programs can help buyers make that big purchase. The American Recovery and Reinvestment Act has increased the First-Time Homebuyer Tax Credit from $7,500 to $8,000 for purchases on or after Jan. 1, 2009, and before Dec. 1, 2009. Talk to a local mortgage lender about state and federal incentive programs.
6. A long-term-growth state. Long-term economic and demographic trends continue to favor Florida. By 2010, economists forecast that Florida will be the third-most-populated state in the country. Florida has been one of the 10-fastest-growing states in the U.S. for each of the past seven decades, and often the state has been in the top four, according to Census data. Population growth will continue to provide a foundation for other economic development, such as new jobs and growing incomes. All of these trends are positive indicators for real estate growth.
7. A migration magnet. Even with a slowdown in economic growth nationally, projections call for Florida's population to return to more normal growth levels of about 317,000 a year between 2010 and 2020, similar to the 1980s and 1990s, said Stan Smith, director of the University of Florida's Bureau of Economic and Business Research. That's a lot of new buyers coming into the market.
8. A favored retirement destination. Over the long term, Florida stands to benefit from the migration of the aging Baby Boomer generation, roughly 80 million strong. Demographic studies show that the Sunshine State's mild climate and outdoor amenities continue to make Florida a favorite retirement destination.
9. A diverse economy. Florida's economy, like the rest of the nation, is impacted by the recession. Some business sectors, though, appear promising for the Florida economy. The healthcare and technology sectors are quickly becoming an important economic force in South and Central Florida. The Milken Institute/Greenstreet Real Estate Partners ranked five Florida communities on its "Best Performing Cities Index 2008," which ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth. Florida's business climate ranked fourth among executives and sixth overall on Site Selection magazine's 2008 Top State Business Climate rankings.
10. Investment outlook. Every quarter, the University of Florida's Bergstrom Center for Real Estate Studies conducts a survey of industry executives, market research economists, real estate scholars and other experts. In the fourth quarter 2008 survey, the investment outlook for various types of Florida properties declined from the third quarter of 2008, although it is noted that the investment outlook remains higher than it was at times in 2006 and 2007. "We have 40 pages of comments from our respondents, and although the dominant theme is the disruption of financing, perhaps the second theme, as one person put it, is people being on the sidelines with full pads and helmets just waiting to jump back in," says Director Dr. Wayne Archer, when referencing the 2008 third quarter results.
11. Homeownership has value. Realtors® believe -- and research supports the belief -- that homeownership provides a variety of tangible and intangible benefits to the community and homeowners. Studies show that home equity is still the largest single source of household wealth.
12. Greater sense of well-being. Owning a home leads to increased personal well-being. Research shows that people who own their own homes tend to show higher levels of personal self-esteem and life satisfaction, which in turn helps to make homeowners and their children more productive members of society.
13. Beneficial for kids. Studies show that children raised in homes owned by their families are more likely to stay in school and graduate high school. They're also shown to have a higher lifetime annual income.
14. Community involvement. People who own homes have a strong financial stake in what happens to their community and tend to become more involved in community and civic affairs. Studies show that homeowners also interact more with their neighbors and communities. Compared to renters, homeowners join up to 41 percent more civic and/or nonprofessional organizations, such as the PTA or Scouts; vote in local elections 15 percent more often; enhance their neighborhoods with gardens 12 percent more often; attend church about 10 percent more often; and have a 3 percent greater chance of being interested in public affairs.
15. An unsurpassed lifestyle. Finally, let's not forget the things that brought people to Florida in the first place, and will continue to attract them -- beautiful beaches, fabulous weather and a friendly business climate, with no state income tax. It's no wonder that Florida's combination of temperate climate, outstanding recreational amenities and economic opportunity has consistently put the Sunshine State in the top three of Harris Poll's "Most Desirable Places to Live" survey
Source: http://www.orlandosentinel.com/classified/realestate/foreclosure/orl-foreclosures-upside-realestate-story,0,7584976.story
2. The time is right. Home sales volumes are rising again -- a signal that the market recovery may be underway. In third quarter 2008, statewide sales of existing single-family homes were up 5 percent compared to the same period last year, according to FAR statistics.
3. High inventory levels. Conditions are ideal for buyers to find their dream home. Inventory is plentiful in all price ranges. But as sales volumes increase, inventory levels are likely to shrink. That reality translates into this advice for buyers: Don't wait too long.
4. Low mortgage rates. Mortgage rates are still at the lowest levels since the 1960s. Lower rates multiply a buyer's financial power. Even half a percent can make a sizeable difference. For example, on a $200,000 home, half of 1 percent could save the homeowner about $815 a year. Buyers can get more home for the money, which is a perfect scenario for families looking to upsize.
5. Incentives to buy. Federal, state and local housing programs can help buyers make that big purchase. The American Recovery and Reinvestment Act has increased the First-Time Homebuyer Tax Credit from $7,500 to $8,000 for purchases on or after Jan. 1, 2009, and before Dec. 1, 2009. Talk to a local mortgage lender about state and federal incentive programs.
6. A long-term-growth state. Long-term economic and demographic trends continue to favor Florida. By 2010, economists forecast that Florida will be the third-most-populated state in the country. Florida has been one of the 10-fastest-growing states in the U.S. for each of the past seven decades, and often the state has been in the top four, according to Census data. Population growth will continue to provide a foundation for other economic development, such as new jobs and growing incomes. All of these trends are positive indicators for real estate growth.
7. A migration magnet. Even with a slowdown in economic growth nationally, projections call for Florida's population to return to more normal growth levels of about 317,000 a year between 2010 and 2020, similar to the 1980s and 1990s, said Stan Smith, director of the University of Florida's Bureau of Economic and Business Research. That's a lot of new buyers coming into the market.
8. A favored retirement destination. Over the long term, Florida stands to benefit from the migration of the aging Baby Boomer generation, roughly 80 million strong. Demographic studies show that the Sunshine State's mild climate and outdoor amenities continue to make Florida a favorite retirement destination.
9. A diverse economy. Florida's economy, like the rest of the nation, is impacted by the recession. Some business sectors, though, appear promising for the Florida economy. The healthcare and technology sectors are quickly becoming an important economic force in South and Central Florida. The Milken Institute/Greenstreet Real Estate Partners ranked five Florida communities on its "Best Performing Cities Index 2008," which ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth. Florida's business climate ranked fourth among executives and sixth overall on Site Selection magazine's 2008 Top State Business Climate rankings.
10. Investment outlook. Every quarter, the University of Florida's Bergstrom Center for Real Estate Studies conducts a survey of industry executives, market research economists, real estate scholars and other experts. In the fourth quarter 2008 survey, the investment outlook for various types of Florida properties declined from the third quarter of 2008, although it is noted that the investment outlook remains higher than it was at times in 2006 and 2007. "We have 40 pages of comments from our respondents, and although the dominant theme is the disruption of financing, perhaps the second theme, as one person put it, is people being on the sidelines with full pads and helmets just waiting to jump back in," says Director Dr. Wayne Archer, when referencing the 2008 third quarter results.
11. Homeownership has value. Realtors® believe -- and research supports the belief -- that homeownership provides a variety of tangible and intangible benefits to the community and homeowners. Studies show that home equity is still the largest single source of household wealth.
12. Greater sense of well-being. Owning a home leads to increased personal well-being. Research shows that people who own their own homes tend to show higher levels of personal self-esteem and life satisfaction, which in turn helps to make homeowners and their children more productive members of society.
13. Beneficial for kids. Studies show that children raised in homes owned by their families are more likely to stay in school and graduate high school. They're also shown to have a higher lifetime annual income.
14. Community involvement. People who own homes have a strong financial stake in what happens to their community and tend to become more involved in community and civic affairs. Studies show that homeowners also interact more with their neighbors and communities. Compared to renters, homeowners join up to 41 percent more civic and/or nonprofessional organizations, such as the PTA or Scouts; vote in local elections 15 percent more often; enhance their neighborhoods with gardens 12 percent more often; attend church about 10 percent more often; and have a 3 percent greater chance of being interested in public affairs.
15. An unsurpassed lifestyle. Finally, let's not forget the things that brought people to Florida in the first place, and will continue to attract them -- beautiful beaches, fabulous weather and a friendly business climate, with no state income tax. It's no wonder that Florida's combination of temperate climate, outstanding recreational amenities and economic opportunity has consistently put the Sunshine State in the top three of Harris Poll's "Most Desirable Places to Live" survey
Source: http://www.orlandosentinel.com/classified/realestate/foreclosure/orl-foreclosures-upside-realestate-story,0,7584976.story
Monday, November 23, 2009
Preparations Prior To Miami Real Estate Home Selling
Selling a home need a lot of preparation and plan, there are many factors that are need to be considered if you want to have a quick sell. In Miami real estate market, there are lots of homes that are for sale which you need to learn about before giving out your asking price.
Considering other people who are selling their home in the area, you need to prepare your home. Take time to tour around the area and see those homes for sale so you can have an idea on how you will be planning the
Most of the time home sellers focus on the physical appearance of their home that is why they do home improvement to make their home look appealing and attract prospect buyer. Maintaining cleanliness and fixing things inside your home is really needed to give buyer good impression on your home. And the best way to do it is to repaint your home with different color combination or use two colors that can blend each other.
Fix broken fixtures inside your home make sure that all faucets are all in a good working condition. If there are leaks, you may need to replace defective faucet. Check all door knobs if are working, faded wall paint must be repainted. In short make sure that all things inside your home are well maintain and in good condition. You should also clean your backyard, cut those tall grasses and remove unnecessary things around your home. If you have a garden, make sure that plants are well cared because it can help in giving a beautiful impression on your home.
In doing these home improvement, make sure that your home will stand out with other homes that are also for sale in the area. You can also ask some assistance on a real estate agent in looking for a buyer. Miami real estate is a place where real estate competition is really tight, preparing and planning for your home selling is really a must, and you have to study every aspect that can affect your Miami real estate home selling.
And before selling or accepting offer from a buyer make sure that you have considered the expenses you have done with home improvement. But in making home improvement make sure that the expenses you will incur is reasonable enough in making your Miami real estate home look beautiful.
Source: Allison Ayson Miami Real Estate http://luxurylivingrealty.net/
Considering other people who are selling their home in the area, you need to prepare your home. Take time to tour around the area and see those homes for sale so you can have an idea on how you will be planning the
Most of the time home sellers focus on the physical appearance of their home that is why they do home improvement to make their home look appealing and attract prospect buyer. Maintaining cleanliness and fixing things inside your home is really needed to give buyer good impression on your home. And the best way to do it is to repaint your home with different color combination or use two colors that can blend each other.
Fix broken fixtures inside your home make sure that all faucets are all in a good working condition. If there are leaks, you may need to replace defective faucet. Check all door knobs if are working, faded wall paint must be repainted. In short make sure that all things inside your home are well maintain and in good condition. You should also clean your backyard, cut those tall grasses and remove unnecessary things around your home. If you have a garden, make sure that plants are well cared because it can help in giving a beautiful impression on your home.
In doing these home improvement, make sure that your home will stand out with other homes that are also for sale in the area. You can also ask some assistance on a real estate agent in looking for a buyer. Miami real estate is a place where real estate competition is really tight, preparing and planning for your home selling is really a must, and you have to study every aspect that can affect your Miami real estate home selling.
And before selling or accepting offer from a buyer make sure that you have considered the expenses you have done with home improvement. But in making home improvement make sure that the expenses you will incur is reasonable enough in making your Miami real estate home look beautiful.
Source: Allison Ayson Miami Real Estate http://luxurylivingrealty.net/
Wednesday, November 18, 2009
Homeowners feel abandoned by builders who used Chinese drywall
Builders abandon them, customers say, but firms say it is more complicated.
About 10 families in The Oaks development west of Boca Raton gathered at a neighbor's house last week to commiserate about the tainted Chinese drywall contained in most of their homes.
The homeowners have contacted their builder, Albanese-Popkin Group, hoping the company would pay to fix their properties or find them rental housing. But they say the builder has abandoned them – while at the same time marketing deeply discounted homes for sale in the upscale community along Clint Moore Road.
Albanese-Popkin says it is pursuing legal action against subcontractors and suppliers and seeking coverage from insurance carriers. The company also notes that federal agencies have not yet established a protocol for repairing homes with Chinese drywall.
The stalemate over the problem drywall is common across Florida, where as many as 36,000 homes could be affected. Homeowners want answers and are filing lawsuits, while builders insist their hands are tied as state and federal officials determine how to fix the homes and whether the drywall poses any health risk.
"There are thousands of people out there begging their builders to help them," said Allison Grant, a Boca Raton attorney who is representing three homeowners in The Oaks and more than 200 statewide.
If builders aren't yet able to fix the homes, they should pay for temporary housing or allow homeowners to live in unsold units, she said. They also can help residents obtain mortgage relief on loans the builders originated.
"Just do something," Grant said.
Kevin Rosen and his wife and two small children moved out of their house at The Oaks this summer, shortly after discovering it had the defective wallboard.
Rosen continues to pay his mortgage and maintenance fees, and he says Albanese-Popkin has not responded to his requests for help. He filed a lawsuit seeking compensation for fixing the four-bedroom house he bought for more than $1 million in 2006.
"Where's the good faith?" said Rosen, 39. "They didn't even organize a meeting in the neighborhood. They have not taken the initiative to help homeowners resolve the problem. The people here are basically on their own."
Albanese-Popkin, a partnership of Leonard Albanese and Edward Popkin, says it has spent three decades building custom estate homes in South Florida and Colorado. In response to The Oaks residents, the company issued a statement, which said, "This is a terrible situation for everyone who is caught up in it. We wish we could do more and had the answers that homeowners want. Given the circumstances, we are taking all the steps we can."
Some industry observers worry that builders agreeing to fix homes with problem drywall immediately could be held liable if the repairs don't work or if they aren't consistent with government guidelines that may come out.
But homeowners say builders are using the lack of government guidelines as an excuse to get out of having to pay millions of dollars for repairs.
Sunrise-based GL Homes and Lennar Corp. of Miami have agreed to fix homes at no cost to the homeowners. The builders are ripping out the drywall and rebuilding homes from the studs out – a method endorsed by scientists who spoke at a state Chinese drywall symposium in Tampa last week.
"We just can't wait" for the government to issue a protocol, said Heather Keith, a lawyer for GL who attended the symposium.
Large volume builders have the resources to more easily help homeowners, said Edie Ousley, spokeswoman for the Florida Home Builders Association.
Lennar, for instance, told federal regulators this summer it set aside roughly $40 million to repair 400 homes with Chinese drywall. That works out to about $100,000 per home.
Ousley said many smaller builders don't have that kind of money and would be forced out of business if they had to fix homes.
"They're just financially unable to do so," she said.
But Rosen's Coral Gables lawyer, Ervin A. Gonzalez, doesn't buy it.
Generally speaking, he said, smaller builders typically set up and fund corporations to build houses. They take the profits as salaries and give bonuses to shareholders, ultimately depleting the corporations of any money that could go to help homeowners repair defective homes.
"It's not illegal," Gonzalez said, "but it sure smells to high heaven."
Source: Paul Owers can be reached at Powers@Sunsentinel.com or 561-243-6529.
http://www.blogger.com/post-create.g?blogID=7446482950087130567
About 10 families in The Oaks development west of Boca Raton gathered at a neighbor's house last week to commiserate about the tainted Chinese drywall contained in most of their homes.
The homeowners have contacted their builder, Albanese-Popkin Group, hoping the company would pay to fix their properties or find them rental housing. But they say the builder has abandoned them – while at the same time marketing deeply discounted homes for sale in the upscale community along Clint Moore Road.
Albanese-Popkin says it is pursuing legal action against subcontractors and suppliers and seeking coverage from insurance carriers. The company also notes that federal agencies have not yet established a protocol for repairing homes with Chinese drywall.
The stalemate over the problem drywall is common across Florida, where as many as 36,000 homes could be affected. Homeowners want answers and are filing lawsuits, while builders insist their hands are tied as state and federal officials determine how to fix the homes and whether the drywall poses any health risk.
"There are thousands of people out there begging their builders to help them," said Allison Grant, a Boca Raton attorney who is representing three homeowners in The Oaks and more than 200 statewide.
If builders aren't yet able to fix the homes, they should pay for temporary housing or allow homeowners to live in unsold units, she said. They also can help residents obtain mortgage relief on loans the builders originated.
"Just do something," Grant said.
Kevin Rosen and his wife and two small children moved out of their house at The Oaks this summer, shortly after discovering it had the defective wallboard.
Rosen continues to pay his mortgage and maintenance fees, and he says Albanese-Popkin has not responded to his requests for help. He filed a lawsuit seeking compensation for fixing the four-bedroom house he bought for more than $1 million in 2006.
"Where's the good faith?" said Rosen, 39. "They didn't even organize a meeting in the neighborhood. They have not taken the initiative to help homeowners resolve the problem. The people here are basically on their own."
Albanese-Popkin, a partnership of Leonard Albanese and Edward Popkin, says it has spent three decades building custom estate homes in South Florida and Colorado. In response to The Oaks residents, the company issued a statement, which said, "This is a terrible situation for everyone who is caught up in it. We wish we could do more and had the answers that homeowners want. Given the circumstances, we are taking all the steps we can."
Some industry observers worry that builders agreeing to fix homes with problem drywall immediately could be held liable if the repairs don't work or if they aren't consistent with government guidelines that may come out.
But homeowners say builders are using the lack of government guidelines as an excuse to get out of having to pay millions of dollars for repairs.
Sunrise-based GL Homes and Lennar Corp. of Miami have agreed to fix homes at no cost to the homeowners. The builders are ripping out the drywall and rebuilding homes from the studs out – a method endorsed by scientists who spoke at a state Chinese drywall symposium in Tampa last week.
"We just can't wait" for the government to issue a protocol, said Heather Keith, a lawyer for GL who attended the symposium.
Large volume builders have the resources to more easily help homeowners, said Edie Ousley, spokeswoman for the Florida Home Builders Association.
Lennar, for instance, told federal regulators this summer it set aside roughly $40 million to repair 400 homes with Chinese drywall. That works out to about $100,000 per home.
Ousley said many smaller builders don't have that kind of money and would be forced out of business if they had to fix homes.
"They're just financially unable to do so," she said.
But Rosen's Coral Gables lawyer, Ervin A. Gonzalez, doesn't buy it.
Generally speaking, he said, smaller builders typically set up and fund corporations to build houses. They take the profits as salaries and give bonuses to shareholders, ultimately depleting the corporations of any money that could go to help homeowners repair defective homes.
"It's not illegal," Gonzalez said, "but it sure smells to high heaven."
Source: Paul Owers can be reached at Powers@Sunsentinel.com or 561-243-6529.
http://www.blogger.com/post-create.g?blogID=7446482950087130567
Monday, November 16, 2009
Housing Market - Survey shows spike in 1st-time homebuyers
The housing market welcomed a bigger share of first-time buyers and single women this past year, while a majority of sellers resorted to dialing down prices to get their homes sold, a new homebuyer survey shows.
First-time buyers accounted for a record 47 percent of home sales between July 2008 and June this year, up from 41 percent in the prior-year period, according to the survey conducted by the National Association of Realtors.
The annual survey gleans details on everything from how buyers came up with down payments to how long it took sellers to unload their homes. The latest results were derived from more than 9,000 responses, the trade association said.
Home sales and prices have shown some signs of stabilizing this year, and the survey results affirm the market continued to favor buyers, particularly first-timers.
“Tax incentives, record high affordability conditions and a pent-up demand brought a record share of first-time home buyers into the market,” said Paul Bishop, the trade association’s vice president of research.
First-time homebuyers this year have been able to take advantage of a tax credit of up to $8,000 meant to entice new homebuyers to enter the market.
Congress extended the tax incentive through next June, as long as the buyer signs a binding contract by the end of April. The program also was expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.
First-time buyers had a median age of 30 and reported a median income of $61,600, the survey shows. The typical first-time buyer paid $156,000 for their home, about $9,000 less than in the Realtors’ 2008 survey.
Repeat buyers were typically a few years older, 48, and earned a bit more than first-timers: $88,100. They also said they planned to stay in the home for 12 years.
Buyers generally took 12 weeks to search for a home, two weeks longer than last year. They also generally looked at 12 homes, up from 10.
Single women made up a slightly bigger share of homebuyers, accounting for 21 percent of buyers. That’s a 1 percent increase from the prior-year survey. Single men accounted for 10 percent of buyers. But married couples continued to make up the majority of buyers at 60 percent, the survey showed.
Whites continued to dominate among homebuyers, representing 85 percent of buyers. That trend was slightly higher than in the 2008 survey.
The median down payment homebuyers made was 8 percent.
More than 61 percent of buyers tapped their savings to come up with the down payment, while 22 percent received a gift from a friend or relative.
Sellers had to go the extra mile to sell their homes, with 52 percent offering incentives like paying for closing costs. They also lowered prices.
The typical home sold for 95 percent of the original listing price, the survey shows.
Still, many sellers came out ahead. The median amount over the price sellers originally paid for their home was $36,000.
Source: http://www.dailybusinessreview.com/news.html?news_id=58659
First-time buyers accounted for a record 47 percent of home sales between July 2008 and June this year, up from 41 percent in the prior-year period, according to the survey conducted by the National Association of Realtors.
The annual survey gleans details on everything from how buyers came up with down payments to how long it took sellers to unload their homes. The latest results were derived from more than 9,000 responses, the trade association said.
Home sales and prices have shown some signs of stabilizing this year, and the survey results affirm the market continued to favor buyers, particularly first-timers.
“Tax incentives, record high affordability conditions and a pent-up demand brought a record share of first-time home buyers into the market,” said Paul Bishop, the trade association’s vice president of research.
First-time homebuyers this year have been able to take advantage of a tax credit of up to $8,000 meant to entice new homebuyers to enter the market.
Congress extended the tax incentive through next June, as long as the buyer signs a binding contract by the end of April. The program also was expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.
First-time buyers had a median age of 30 and reported a median income of $61,600, the survey shows. The typical first-time buyer paid $156,000 for their home, about $9,000 less than in the Realtors’ 2008 survey.
Repeat buyers were typically a few years older, 48, and earned a bit more than first-timers: $88,100. They also said they planned to stay in the home for 12 years.
Buyers generally took 12 weeks to search for a home, two weeks longer than last year. They also generally looked at 12 homes, up from 10.
Single women made up a slightly bigger share of homebuyers, accounting for 21 percent of buyers. That’s a 1 percent increase from the prior-year survey. Single men accounted for 10 percent of buyers. But married couples continued to make up the majority of buyers at 60 percent, the survey showed.
Whites continued to dominate among homebuyers, representing 85 percent of buyers. That trend was slightly higher than in the 2008 survey.
The median down payment homebuyers made was 8 percent.
More than 61 percent of buyers tapped their savings to come up with the down payment, while 22 percent received a gift from a friend or relative.
Sellers had to go the extra mile to sell their homes, with 52 percent offering incentives like paying for closing costs. They also lowered prices.
The typical home sold for 95 percent of the original listing price, the survey shows.
Still, many sellers came out ahead. The median amount over the price sellers originally paid for their home was $36,000.
Source: http://www.dailybusinessreview.com/news.html?news_id=58659
Friday, November 13, 2009
You may qualify for a home-buyer tax credit
Millions of additional people may be able to take advantage of the new and improved first-time home-buyer tax credit now, and it's not just for first-time home buyers anymore. You may qualify.
President Obama signed legislation Friday to extend unemployment benefits to American workers. The law also includes provisions that vastly expand the number of people eligible for home-buyer credits by boosting the income eligibility limits, giving buyers more time, creating a $6,500 credit for longtime homeowners and launching more-accommodating rules for members of the military. Here are the details.
The $8,000 credit
If you were locked out of the first-time home-buyer credit in the past simply because you earned too much, there's good news.
Now you can qualify for the full $8,000 first-time home-buyer credit with a single income of up to $125,000 and married income of up to $225,000. Those who earn more will be phased out.
The credit ends completely once single income exceeds $145,000 and married income exceeds $245,000. Still, that's a big boost from the previous law that shut off the credit for singles earning more than $95,000 and married couples who earned more than $170,000. Other eligibility rules
* You must not have owned another home for at least the previous three years.
* You must buy a home (or have a binding contract to buy) by April 30, 2010. Under the new law, if the sale doesn't close on time, you can still get the credit as long as you've got a binding contract on the ending date, said Jackie Perlman, tax analyst with the Tax Institute at H&R Block in Kansas City.
* You must be older than 18 and not claimed as a dependent by any other taxpayer.
* The property you purchase cannot have been acquired from a relative.
* You must attach a copy of your settlement statement with your tax return to claim the credit.
* Most buyers also must continue to own this new home for at least three years. If they sell in less time, the government will demand that they pay the credit back, said Clint Stretch, director of tax policy with Deloitte Tax.
Special rules for military
The government will not require repayment of the credit if you are a member of the military and had to sell or stop using the home as a residence because of extended duty, however.
In addition, those serving outside of the U.S. during any part of 2009 or early 2010 will get an additional year to claim the credit. In other words, the credit ends for most people on April 30, 2010, but it lasts until April 30, 2011, for active-duty service members working overseas.
The $6,500 credit
The new law carves out an additional credit for current homeowners.
If you have owned and lived in a home for at least five consecutive years of the last eight years, you could qualify for a $6,500 tax credit, if you buy a new home between now and April 30.
The "five-of-eight" requirement means that this credit could accommodate people who lost their homes in the last year or two to foreclosure or even sold a house and didn't immediately replace it, said John. W. Roth, senior tax analyst with CCH Inc., a Riverwoods, Ill., publisher of tax information.
Would you have to sell your residence for it to qualify for the $6,500 credit, if you wanted to buy a new one? Not necessarily, Roth said. The home you purchase must become your principal residence, so you would have to move there. But nothing in the law says you cannot keep your existing residence as a second home or rental, he said.
If you do choose to sell your existing residence, you need to pay close attention to how much you earn on that sale, Stretch said. That's because taxable profits from the sale of your residence will be added to your other earnings to determine whether your adjusted gross income exceeds the allowable thresholds.
This credit also phases out for singles earning more than $125,000 and married couples earning more than $225,000.
On the bright side, some profits from the sale of a personal residence don't count. That's because taxpayers are allowed to exclude up to $250,000 per person or $500,000 per couple in profits on the sale of their personal residence from tax, if they lived in that home for two of the last five years, Stretch said. Only profits exceeding those excluded amounts would be included in income, he noted.
Getting muddled? Let's look at an example to clarify.
John and Sue Smith own a home that they bought for $100,000 in 1965. They're now retired and want to scale back, selling that home, which is now worth $750,000, and buying a smaller home with the help of the new $6,500 credit.
Their net profit on this sale would be $650,000, but they can exclude $500,000 of that gain from tax, based on existing law. They will have to add the remaining $150,000 capital gain to their adjusted gross income to determine whether they can qualify for the new credit.
If all of their other income adds up to less than $75,000, they have no worries because the $150,000 and $75,000 add up to $225,000 -- the beginning of the credit's phase-out range for married couples. If they earn more, however, they begin to lose their ability to take the credit.
There are other arcane rules relating to profits earned on the sale of a home, so those with substantial profits may want to consult a tax professional before banking on the credit.
"It's really confusing," Roth allowed. "It's as if they took the old law and threw it in a Mixmaster. Some things still apply; others don't. The time frames are all new. This is going to keep a lot of tax accountants in business for a long time."
Source: http://www.sun-sentinel.com/business/realestate/sfl-first-time-credit-110909,0,177297.column
President Obama signed legislation Friday to extend unemployment benefits to American workers. The law also includes provisions that vastly expand the number of people eligible for home-buyer credits by boosting the income eligibility limits, giving buyers more time, creating a $6,500 credit for longtime homeowners and launching more-accommodating rules for members of the military. Here are the details.
The $8,000 credit
If you were locked out of the first-time home-buyer credit in the past simply because you earned too much, there's good news.
Now you can qualify for the full $8,000 first-time home-buyer credit with a single income of up to $125,000 and married income of up to $225,000. Those who earn more will be phased out.
The credit ends completely once single income exceeds $145,000 and married income exceeds $245,000. Still, that's a big boost from the previous law that shut off the credit for singles earning more than $95,000 and married couples who earned more than $170,000. Other eligibility rules
* You must not have owned another home for at least the previous three years.
* You must buy a home (or have a binding contract to buy) by April 30, 2010. Under the new law, if the sale doesn't close on time, you can still get the credit as long as you've got a binding contract on the ending date, said Jackie Perlman, tax analyst with the Tax Institute at H&R Block in Kansas City.
* You must be older than 18 and not claimed as a dependent by any other taxpayer.
* The property you purchase cannot have been acquired from a relative.
* You must attach a copy of your settlement statement with your tax return to claim the credit.
* Most buyers also must continue to own this new home for at least three years. If they sell in less time, the government will demand that they pay the credit back, said Clint Stretch, director of tax policy with Deloitte Tax.
Special rules for military
The government will not require repayment of the credit if you are a member of the military and had to sell or stop using the home as a residence because of extended duty, however.
In addition, those serving outside of the U.S. during any part of 2009 or early 2010 will get an additional year to claim the credit. In other words, the credit ends for most people on April 30, 2010, but it lasts until April 30, 2011, for active-duty service members working overseas.
The $6,500 credit
The new law carves out an additional credit for current homeowners.
If you have owned and lived in a home for at least five consecutive years of the last eight years, you could qualify for a $6,500 tax credit, if you buy a new home between now and April 30.
The "five-of-eight" requirement means that this credit could accommodate people who lost their homes in the last year or two to foreclosure or even sold a house and didn't immediately replace it, said John. W. Roth, senior tax analyst with CCH Inc., a Riverwoods, Ill., publisher of tax information.
Would you have to sell your residence for it to qualify for the $6,500 credit, if you wanted to buy a new one? Not necessarily, Roth said. The home you purchase must become your principal residence, so you would have to move there. But nothing in the law says you cannot keep your existing residence as a second home or rental, he said.
If you do choose to sell your existing residence, you need to pay close attention to how much you earn on that sale, Stretch said. That's because taxable profits from the sale of your residence will be added to your other earnings to determine whether your adjusted gross income exceeds the allowable thresholds.
This credit also phases out for singles earning more than $125,000 and married couples earning more than $225,000.
On the bright side, some profits from the sale of a personal residence don't count. That's because taxpayers are allowed to exclude up to $250,000 per person or $500,000 per couple in profits on the sale of their personal residence from tax, if they lived in that home for two of the last five years, Stretch said. Only profits exceeding those excluded amounts would be included in income, he noted.
Getting muddled? Let's look at an example to clarify.
John and Sue Smith own a home that they bought for $100,000 in 1965. They're now retired and want to scale back, selling that home, which is now worth $750,000, and buying a smaller home with the help of the new $6,500 credit.
Their net profit on this sale would be $650,000, but they can exclude $500,000 of that gain from tax, based on existing law. They will have to add the remaining $150,000 capital gain to their adjusted gross income to determine whether they can qualify for the new credit.
If all of their other income adds up to less than $75,000, they have no worries because the $150,000 and $75,000 add up to $225,000 -- the beginning of the credit's phase-out range for married couples. If they earn more, however, they begin to lose their ability to take the credit.
There are other arcane rules relating to profits earned on the sale of a home, so those with substantial profits may want to consult a tax professional before banking on the credit.
"It's really confusing," Roth allowed. "It's as if they took the old law and threw it in a Mixmaster. Some things still apply; others don't. The time frames are all new. This is going to keep a lot of tax accountants in business for a long time."
Source: http://www.sun-sentinel.com/business/realestate/sfl-first-time-credit-110909,0,177297.column
Thursday, November 12, 2009
Foreclosures dip 3 pct. in October from September
The number of homeowners on the brink of losing their homes dipped in October, the third straight monthly decline, as foreclosure prevention programs helped more borrowers.
But foreclosure filings are still up 19 percent from a year ago, RealtyTrac Inc. said Thursday, and rising job losses continue to threaten the stabilizing trend.
More than 332,000 households, or one in every 385 homes, received a foreclosure-related notice in October, such as a notice of default or trustee's sale. That's down 3 percent from September.
Banks repossessed more than 77,000 homes last month, down from nearly 88,000 homes in September.
New state programs, like one launched in Nevada in July, that require mediation before banks can seize a property have helped stem foreclosure activity, said Rick Sharga, senior vice president at RealtyTrac.
Also, anecdotally, lenders are delaying foreclosure as they evaluate which borrowers might qualify for the federal loan modification program, he said.
"That's the reason there's been a buildup of homes that are seriously delinquent but not foreclosed," he said.
Despite Nevada's legislative efforts to slow foreclosures, the state still clocked in the nation's highest foreclosure rate for the 34th month in a row, followed by California, Florida, Arizona and Idaho. Rounding out the top 10 were Illinois, Michigan, Georgia, Maryland and Utah.
Among cities, Las Vegas had the highest rate, the report showed. One in 68 homes there received a foreclosure filing in October, more than five times the national average. Seven of the top ten metros were in California, led by Vallejo and Modesto at No. 2 and 3.
After three years of declines, home prices reversed course in June and have been rapidly climbing month-over-month. This will rebuild home equity and reduce the number of borrowers that owe more than their homes are worth.
Still, foreclosures remain near record highs and the mortgage industry is still struggling to manage the onslaught. The government has had to push many lenders to participate in the Obama administration's loan modification plan.
The Treasury Department said Tuesday that more than 650,000 borrowers, or 20 percent of those eligible, had signed up for temporary trial plans lasting up to five months. But since the beginning of September, only about 1,700 modifications had been made permanent. The Treasury Department expects to release updated data later this month.
Congress last week also extended and expanded a key federal tax credit for homebuyers that has been credited for boosting home sales recently.
Buyers who have owned their current homes for at least five years are eligible for tax credits of up to $6,500, while first-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
"Anything that stimulates buying activity," Sharga said, "will go a long way to mediate the foreclosure problem."
Source: http://www.dailybusinessreview.com/news.html?news_id=58589
But foreclosure filings are still up 19 percent from a year ago, RealtyTrac Inc. said Thursday, and rising job losses continue to threaten the stabilizing trend.
More than 332,000 households, or one in every 385 homes, received a foreclosure-related notice in October, such as a notice of default or trustee's sale. That's down 3 percent from September.
Banks repossessed more than 77,000 homes last month, down from nearly 88,000 homes in September.
New state programs, like one launched in Nevada in July, that require mediation before banks can seize a property have helped stem foreclosure activity, said Rick Sharga, senior vice president at RealtyTrac.
Also, anecdotally, lenders are delaying foreclosure as they evaluate which borrowers might qualify for the federal loan modification program, he said.
"That's the reason there's been a buildup of homes that are seriously delinquent but not foreclosed," he said.
Despite Nevada's legislative efforts to slow foreclosures, the state still clocked in the nation's highest foreclosure rate for the 34th month in a row, followed by California, Florida, Arizona and Idaho. Rounding out the top 10 were Illinois, Michigan, Georgia, Maryland and Utah.
Among cities, Las Vegas had the highest rate, the report showed. One in 68 homes there received a foreclosure filing in October, more than five times the national average. Seven of the top ten metros were in California, led by Vallejo and Modesto at No. 2 and 3.
After three years of declines, home prices reversed course in June and have been rapidly climbing month-over-month. This will rebuild home equity and reduce the number of borrowers that owe more than their homes are worth.
Still, foreclosures remain near record highs and the mortgage industry is still struggling to manage the onslaught. The government has had to push many lenders to participate in the Obama administration's loan modification plan.
The Treasury Department said Tuesday that more than 650,000 borrowers, or 20 percent of those eligible, had signed up for temporary trial plans lasting up to five months. But since the beginning of September, only about 1,700 modifications had been made permanent. The Treasury Department expects to release updated data later this month.
Congress last week also extended and expanded a key federal tax credit for homebuyers that has been credited for boosting home sales recently.
Buyers who have owned their current homes for at least five years are eligible for tax credits of up to $6,500, while first-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
"Anything that stimulates buying activity," Sharga said, "will go a long way to mediate the foreclosure problem."
Source: http://www.dailybusinessreview.com/news.html?news_id=58589
Wednesday, November 11, 2009
5 pct. of Americans plan to buy a home next year
Just one in 20 Americans say they plan to buy a home within the next year, and they’re most likely to be 34 years old or younger and living in the South or West, according to a survey released Wednesday.
Roughly a quarter of potential buyers said the No. 1 reason they would buy now is because prices appear to have bottomed out. That reason topped bargain-priced foreclosures, worries about rising interest rates and a wide selection of homes.
The survey, conducted for Move.com, a real estate listings site, reveals how Americans are responding to a nascent and fragile housing recovery after three years of staggering price declines. The percentage of buyers thinking of jumping into the market was down slightly from a March survey, but up about 1 point from a poll in June.
Home prices rebounded this summer at an annualized pace of almost 7 percent, according to the Standard & Poor’s/Case-Shiller home price index. But with high unemployment and foreclosures clouding the picture, economists debate whether prices will dip again.
Recent housing figures and homebuilder earnings support a stabilizing housing market, and concerns about the expiration of federal homebuyer tax credit are moot after Congress last week extended and expanded the credit
Buyers who have owned in their current homes for at least five years are eligible for tax credits of up to $6,500, while first-time homebuyers — or anyone who hasn’t owned a home in the last three years — would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
The survey was conducted before the credit extension.
Those surveyed widely favored federal policies that kept interest rates low and helped troubled homeowners avoid foreclosure over those that helped first-time homebuyers purchase a home. And, overall, 48 percent of those polled didn’t think the government was doing enough to stabilize the housing market, whereas 42 percent thought it was.
Forty-five percent of Americans worry that they or someone they know will face foreclosure in the next year. And almost 30 percent of those with a mortgage have contacted their lender in the past year to reduce their payments.
One of the survey participants, Joe Handley of Harrington, Del., called his lender last December to consolidate a second mortgage and cut his interest rate from 6.75 percent to 5.25 percent.
“We wanted to build up our savings for emergencies,” the 37-year-old said.
His timing was prescient. In July, Handley, who works in the information technology department for the State of Delaware, took a pay cut and the $400 monthly savings from the new loan has helped cushion the blow.
Almost a quarter of Americans who refinanced their mortgages have used the savings for living expenses or paying down debt, the survey found. Less than 9 percent are putting the savings toward investment or retirement.
The telephone poll, which included about two-thirds homeowners and one-third renters, was conducted in October by market research firm GfK. It had a margin of error of plus or minus 3 percentage points
Source: http://www.dailybusinessreview.com/news.html?news_id=58575
Roughly a quarter of potential buyers said the No. 1 reason they would buy now is because prices appear to have bottomed out. That reason topped bargain-priced foreclosures, worries about rising interest rates and a wide selection of homes.
The survey, conducted for Move.com, a real estate listings site, reveals how Americans are responding to a nascent and fragile housing recovery after three years of staggering price declines. The percentage of buyers thinking of jumping into the market was down slightly from a March survey, but up about 1 point from a poll in June.
Home prices rebounded this summer at an annualized pace of almost 7 percent, according to the Standard & Poor’s/Case-Shiller home price index. But with high unemployment and foreclosures clouding the picture, economists debate whether prices will dip again.
Recent housing figures and homebuilder earnings support a stabilizing housing market, and concerns about the expiration of federal homebuyer tax credit are moot after Congress last week extended and expanded the credit
Buyers who have owned in their current homes for at least five years are eligible for tax credits of up to $6,500, while first-time homebuyers — or anyone who hasn’t owned a home in the last three years — would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
The survey was conducted before the credit extension.
Those surveyed widely favored federal policies that kept interest rates low and helped troubled homeowners avoid foreclosure over those that helped first-time homebuyers purchase a home. And, overall, 48 percent of those polled didn’t think the government was doing enough to stabilize the housing market, whereas 42 percent thought it was.
Forty-five percent of Americans worry that they or someone they know will face foreclosure in the next year. And almost 30 percent of those with a mortgage have contacted their lender in the past year to reduce their payments.
One of the survey participants, Joe Handley of Harrington, Del., called his lender last December to consolidate a second mortgage and cut his interest rate from 6.75 percent to 5.25 percent.
“We wanted to build up our savings for emergencies,” the 37-year-old said.
His timing was prescient. In July, Handley, who works in the information technology department for the State of Delaware, took a pay cut and the $400 monthly savings from the new loan has helped cushion the blow.
Almost a quarter of Americans who refinanced their mortgages have used the savings for living expenses or paying down debt, the survey found. Less than 9 percent are putting the savings toward investment or retirement.
The telephone poll, which included about two-thirds homeowners and one-third renters, was conducted in October by market research firm GfK. It had a margin of error of plus or minus 3 percentage points
Source: http://www.dailybusinessreview.com/news.html?news_id=58575
Thursday, November 5, 2009
Town hall draws crowd, questions about condos, HOAs
For more information go to www.BuyMiami.net
Here is what is most clear after last week's Sun Sentinel Town Hall Meeting on Condos & HOAs: Many owners and board members from community associations across South Florida are frustrated and fearful about finances, foreclosures and other festering issues.
And there is no denying that there is a need for solutions, and for help from lawmakers.
Approximately 250 people from Broward, Palm Beach and Miami-Dade counties attended the Oct. 29 event sponsored by the Sun Sentinel and hosted by Nova Southeastern University in Davie. On. 27, the newspaper also held a Condos & HOAs online chat, which drew nearly 300 participants who posted about 180 questions.
Several key questions emerged over and over again. Many who participated in the chat and town hall wanted to know what potential reforms lawmakers plan to consider when they reconvene next year.
"We are caught in a terrible situation," said Diana Correll, of Deerfield Beach, whose sentiments were typical of many with foreclosure concerns. "A large number of properties in condo and homeowners associations have been taken over by banks, residents are just picking up and leaving their properties along with their commitments, and [there is the] added problem of people who continue to live in their properties while not paying maintenance fees.
"For answers, we turned to a panel of local experts: Jan Bergemann, president of Cyber Citizens for Justice; Donna D. Berger, executive director of Community Advocacy Network (CAN) and managing partner at Katzman Garfinkel Rosenbaum; Gary A. Poliakoff, attorney with Becker & Poliakoff P.A. and professor at Nova Southeastern University's law school; William Raphan, supervisor of the state Office of the Condominium Ombudsman in Fort Lauderdale; and State Rep. Julio Robaina, R-Miami.
What are the insurance requirements for condo owners?
Many voiced concerns about complex and confusing condo and HOA laws and insurance requirements.
Here is what you need to know, says Raphan: Unit owners are required to carry homeowners insurance with property loss assessment coverage of no less than $2,000 per occurrence, and the association must have an additional named insured and loss payee. The association requires proof of a currently effective hazard and liability policy from each owner, and may purchase a policy on behalf of the owner if he or she does not provide a valid certificate of insurance.
Unfortunately, the statutes suggest associations may purchase an insurance policy on behalf of a noncompliant owner, but do not say they must do so, leaving association boards -- and their attorneys -- to figure out what to do for themselves.
Who will fix foreclosure banking flaws?
Robaina promised, along with other lawmakers in the audience, to clean up this statute problem and others, including laws related to foreclosure processes. Many condo owners and homeowners complain that banks are allowed to forestall foreclosures and skip paying their share of maintenance fees.
Robaina said lawmakers are aware of widespread problems, and they are among potential reforms to look out for next legislative session. No details yet of what can be done, but possibilities include requiring banks to pay fees sooner than the 12 to 18 months it typically takes now to complete a foreclosure.
Source: http://www.sun-sentinel.com/business/realestate/condos/sfl-town-hall-condocol-110409,0,5747753.column
Daniel Vasquez can be reached at condocolumn@SunSentinel.com, 954-356-4219 or 561-243-6686. His condo column runs every Wednesday in the Local section and at SunSentinel.com/condos. Check out Daniel's Condos & HOAs blog for news, information and tips related to life in community associations at SunSentinel.com/condoblog. You can also read his consumer column every Monday in Your Money and at SunSentinel.com/vasquez.
Here is what is most clear after last week's Sun Sentinel Town Hall Meeting on Condos & HOAs: Many owners and board members from community associations across South Florida are frustrated and fearful about finances, foreclosures and other festering issues.
And there is no denying that there is a need for solutions, and for help from lawmakers.
Approximately 250 people from Broward, Palm Beach and Miami-Dade counties attended the Oct. 29 event sponsored by the Sun Sentinel and hosted by Nova Southeastern University in Davie. On. 27, the newspaper also held a Condos & HOAs online chat, which drew nearly 300 participants who posted about 180 questions.
Several key questions emerged over and over again. Many who participated in the chat and town hall wanted to know what potential reforms lawmakers plan to consider when they reconvene next year.
"We are caught in a terrible situation," said Diana Correll, of Deerfield Beach, whose sentiments were typical of many with foreclosure concerns. "A large number of properties in condo and homeowners associations have been taken over by banks, residents are just picking up and leaving their properties along with their commitments, and [there is the] added problem of people who continue to live in their properties while not paying maintenance fees.
"For answers, we turned to a panel of local experts: Jan Bergemann, president of Cyber Citizens for Justice; Donna D. Berger, executive director of Community Advocacy Network (CAN) and managing partner at Katzman Garfinkel Rosenbaum; Gary A. Poliakoff, attorney with Becker & Poliakoff P.A. and professor at Nova Southeastern University's law school; William Raphan, supervisor of the state Office of the Condominium Ombudsman in Fort Lauderdale; and State Rep. Julio Robaina, R-Miami.
What are the insurance requirements for condo owners?
Many voiced concerns about complex and confusing condo and HOA laws and insurance requirements.
Here is what you need to know, says Raphan: Unit owners are required to carry homeowners insurance with property loss assessment coverage of no less than $2,000 per occurrence, and the association must have an additional named insured and loss payee. The association requires proof of a currently effective hazard and liability policy from each owner, and may purchase a policy on behalf of the owner if he or she does not provide a valid certificate of insurance.
Unfortunately, the statutes suggest associations may purchase an insurance policy on behalf of a noncompliant owner, but do not say they must do so, leaving association boards -- and their attorneys -- to figure out what to do for themselves.
Who will fix foreclosure banking flaws?
Robaina promised, along with other lawmakers in the audience, to clean up this statute problem and others, including laws related to foreclosure processes. Many condo owners and homeowners complain that banks are allowed to forestall foreclosures and skip paying their share of maintenance fees.
Robaina said lawmakers are aware of widespread problems, and they are among potential reforms to look out for next legislative session. No details yet of what can be done, but possibilities include requiring banks to pay fees sooner than the 12 to 18 months it typically takes now to complete a foreclosure.
Source: http://www.sun-sentinel.com/business/realestate/condos/sfl-town-hall-condocol-110409,0,5747753.column
Daniel Vasquez can be reached at condocolumn@SunSentinel.com, 954-356-4219 or 561-243-6686. His condo column runs every Wednesday in the Local section and at SunSentinel.com/condos. Check out Daniel's Condos & HOAs blog for news, information and tips related to life in community associations at SunSentinel.com/condoblog. You can also read his consumer column every Monday in Your Money and at SunSentinel.com/vasquez.
Wednesday, November 4, 2009
Real Estate's Biggest Deals: Commercial Market
With values dropping, sales declining and credit scarce, it was not a good year to sell commercial real estate in South Florida.
Deals were getting done, but nowhere near the level of five or six years ago when buyers were plentiful and prices steadily climbed.
And things are likely to get worse as the economic crisis deepens.
Unemployment is growing, retailers are facing the worst holiday season in years, and the credit market remains a mess. With billions in short-term loans coming due, numerous commercial property owners across South Florida could be facing foreclosure.
Yet a wave of foreclosure could ultimately be the salvation of the industry as cut-rate properties valued on their income — rather than on investors’ optimistic expectations — hit the market.
“You are starting to see [commercial loans go in default] because owners cannot pay their loans,” said Steven Beauchamp, president of Mangrove Advisory Group.
“The first half of 2009 will be similar to the last half of 2008, with very little activity in commercial real estate,” said Gabriel Navarro, a principal with MMG Equity Partners in Miami. Navarro, along with partners Marcel Navarro and Martin Pico, buys, manages and develops commercial properties throughout South Florida.
“There is still a gap between sellers’ expectations of value and what buyers are willing to pay. The gap may be increasing, as many buyers are of the opinion that what you buy today will be less tomorrow.”
Sales of South Florida commercial properties plummeted in the first nine months of the year.
In Miami-Dade County, sales declined 62 percent to $1.68 billion during the period from January to September, compared with the same period a year ago, according to Real Capital Analytics.
Commercial sales in Broward County fell 80 percent to $747 million, and in Palm Beach County, they declined 53 percent to $932 million.
Cash deals
Unlike in the past, most recent large acquisitions didn’t include financing but were cash deals. Most of the buying was done by institutional investors with deep pockets such as pension funds and life insurers.
During the hot real estate market of the early- and mid-decade, many buyers were non-institutional investor groups that often borrowed as much as 95 percent of the property’s value.
Real estate experts said there are plenty of private equity funds with money to invest, but the potential buyers don’t like the prices.
Those short-term buyers want to earn at least a 20 percent profit when they sell in a few years, and to achieve that target, they need to buy low, said Stephen Nostrand, executive vice president in the investment sales division of Colliers Abood Wood-Fay in Coral Gables.
Beauchamp said investors are waiting on the sidelines for lenders to take title to distressed commercial properties.
They speculate that lenders — and possibly government agencies — will offer greater discounts because they will be more eager to unload the troubled assets.
That theory could prove true.
In 1989, Congress created the Resolution Trust Corp. to auction shopping centers, offices and condos taken back by savings and loans that later became insolvent.
Many of those assets were bundled and sold to investors at large discounts. The total bill to taxpayers was $87 billion, according to former Federal Reserve Chairman Alan Greenspan. Many deals in 2009 will involve private owners of struggling shopping centers, office buildings and warehouses with rising vacancy rates and shrinking income, predicted real estate broker Neil Merin, with NAI/Merin Hunter Codman in West Palm Beach.
“In the next three to six months, we will see a lot of foreclosure sales,” he said. “But it won’t be like during the savings and loans crisis in the 1980s and 1990s, when 100 percent of the sales were foreclosures.”
Michael Stein, managing director of the Aztec Group in Coconut Grove, said lenders are increasingly seeking advice from his firm on how best to dispose of poorly performing properties with delinquent mortgages or loans that are worth a lot more than the depreciating collateral.
“We went to them looking for business a year ago, but they told us they didn’t have any nonperforming loans,” he said. “Now, we are getting calls from them requesting our services.”
J. Kingsley Greenland, president and chief executive officer of The Debt Exchange based in Boston, said lenders in South Florida are quietly selling loans — some that are current, others that are nonperforming — to investors.
Greenland, whose firm specializes in finding buyers for bad loans, said most of the troubled loans in South Florida are backed by properties whose owners loaded them up with debt during the run-up in prices over the last five years. He said some non-performing loans that have land as collateral are selling for 40 cents on the dollar.
“Banks are trying to get the problem behind them to go back to lending,” said Greenland, who declined to name lenders using his services to sell non-performing notes.
Some of the most prominent sales in 2009 are expected to involve properties whose owners have loans about to come due. Their options will be limited. In many cases the value of their properties have declined, and lenders willing to make loans are demanding that owners increase their equity in the building and boost their cash reserves.
Some real estate experts say it’s too early to forecast the direction the commercial real estate market will take next year. When President-elect Barack Obama takes office in January, he could launch policy changes that might significantly impact the market, said real estate broker Richard Matricaria, vice president of investments at Marcus & Millichap in Fort Lauderdale.
For example, Obama is proposing to boost taxes on capital gains — the profit earned when an asset is sold — from 15 percent to at least 20 percent. Hoping to cash in before the tax rate increases, long-term owners might be motivated to sell properties that have appreciated significantly.
“If the capital gains tax is to go into effect in 2010, sellers may be looking to cash out next year,” Matricaria said.
Obama is also proposing an additional stimulus package that could inject billions of additional dollars into the economy.
If the strategy is successful, retailers, restaurants and distribution companies might need more space. That would boost demand for shopping centers, warehouses and other commercial properties and help increase sales of those properties.
Falling values
For now, however, rising vacancies and falling rent rates are depressing the value of income-producing properties in South Florida.
Values could fall between 5 percent and 20 percent in the next 18 months, according to William Hemingway, co-managing director of real estate consultancy Integra Realty Resources in Miami.
Nationally, the Moody’s/REAL Commercial Property Price Indices reported that commercial properties lost 11.2 percent in value in August compared with the same month in 2007.
Capitalization rates — a key valuation measure based on the ratio between cash flow and a rental property’s market value — are on the rise. The higher the cap rate, the lower the price of the property.
But because properties are generating less revenue, cap rates are increasing from 0.5 percent to 2 percent, reaching at least 7 percent in some Class A properties and more than 8 percent in less stellar properties, Hemingway said.
Values are likely to continue to drop as the region’s economy shrinks and unemployment rises. In Miami-Dade County, unemployment increased to 6.1 percent in September, up from 3.9 percent in September 2007. The jobless rate in Broward County hit 6 percent, up from 4.1 percent the year before. And in Palm Beach County, it rose to 7.3 percent, up from 5 percent, according to the Florida Agency for Workforce Innovation.
As consumers cut back on spending, retailers and service providers are downsizing or closing shop.
As a result, office space vacancies in South Florida reached 11.4 percent in the third quarter of 2008, up from 10.4 percent in the first quarter of 2008, according to CoStar Group, a real estate research firm.
Retail vacancies jumped to 4.7 percent, up from 4.2 percent. Industrial vacancies jumped to 7.4 percent, up from 6.1 percent.
With rental rates flat, landlords are increasingly having to dangle upgrades or offer one or two months of free rent to attract or retain tenants.
Those expenses eat into operating income, said Doron Valero, managing partner of Global Fund Investments in Miami Beach.
“Why would you want to buy a property when it requires a lot of cash at a time when rents are not growing but going the other way?” he asked.
Lenders know rents are soft and take that into account when underwriting commercial loans, he said.
Until recently, lenders would look at the rent rates charged by a landlord and lend money based on the net operating income. Now, lenders compared a building’s rental rates with the prevailing rates.
“If the rent at your shopping center is $30 per square foot but the retail center across the street charges $25 per square foot, banks will go with the lower rent because they know you will have to lower your rent to attract new tenants when your current tenants move out,” he said.
As a result, lenders are willing to finance between 50 percent to 65 percent of the market value of a commercial property, down from 85 percent more than a year ago.
Dealmaking will remain slow until financing loosens up.
“There is not much trading of Class B and C properties because it is very hard to get financing,” said real estate broker Jay Caplin, who leads Cushman & Wakefield’s Capital Markets Group in Miami. “Lenders are being selective and lending to better quality properties.”
Navarro, whose family owns Navarro Pharmacies, said he had a hard time securing financing to buy a Class B shopping center for $22.5 million last month. Navarro obtained a short-term, $10 million loan to acquire a 94,816-square-foot shopping center in western Miami-Dade County, he said.
“Securing financing was difficult, to say the least, and securing attractive financing was nearly impossible,” he said. “We [ended up] securing a short-term bridge loan with Wachovia for a portion of the purchase price to close and will work on placing longer-term debt on the property in the next 30 to 60 days.”
Navarro is confident he will be able to refinance the shopping center with a long-term loan, because he already has 50 percent equity on the property.
Source: http://www.dailybusinessreview.com/news.html?news_id=51726
Paola Iuspa-Abbott can be reached at (305) 347-6657.
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