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
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