1. Once-in-a-generation time to buy. Who’s in?
Most renters want to buy a home: 72 percent consider homeownership a good financial decision, and 64 percent believe the time is right, according to the National Association of Realtors® 2011 Housing Pulse survey. Mortgage rates hit a record low of 3.94 percent this year, homes sold for a fraction of their value five years ago, and excess inventory provided every buyer with a range of options. In some cities, homeownership became cheaper than renting. But job insecurities made buyers nervous to commit. Those who did found it difficult to get financing despite stellar credit scores. As a result, 2011 saw a real estate market with great deals, yet fewer buyers than needed. In 10 years, however, many Americans may look back on 2011 as the best time in a generation to invest in real estate.
2. The economy rebounded, sorta, kinda, a little
The Florida economy remained sluggish as unemployment rates stayed uncomfortably high and home sales stayed uncomfortably low; but, across the board, the state showed signs of recovery, with almost every economic indicator suggesting brighter days ahead. Home sales edged higher most months; selling prices held their own and, in a few cases, median selling prices rose. Floridians’ consumer confidence also rose toward the end of the year after bobbing around for most of the summer. Employment followed, and while the state has a long way to go to hit “normal,” it reached a 2011 level of “better than last year.”
3. Commercial market leaves “dire” for “not as bad”
Florida investors increasingly want to buy office, retail and industrial properties, says Cynthia Shelton, Florida Realtors’ 2009 president and a director at Colliers International in Orlando. Vacancy rates, while high, have stabilized, along with rental rates. Core assets (essential to businesses) are selling and lenders – including the life insurance companies – are lending again. Banks are more realistic about prices for distressed properties, and 2012 should see the entry of more commercial tenants. “With modest economic growth and job creation, the fundamentals for commercial real estate should gradually improve in the coming year,” adds Lawrence Yun, NAR chief economist.
4. Florida Legislature: We got Amendment 4 and scrapped the cap
Florida Realtors had a number of victories in the 2011 Florida Legislature, but none as important as a constitutional amendment voters will consider in November 2012, and none so hard-fought as a law to “scrap the cap” on Florida’s affordable housing trust funds. Amendment 4, if approved by Florida voters, will create a property tax increase cap of 5 percent each year on non-homestead real estate, down from the current 10 percent cap. It will also give some first-time homebuyers a property tax break that decreases over time. In 2012, Florida Realtors will roll out its “Yes on 4” campaign. In the “scrap the cap” victory, the Florida Legislature agreed to allow all doc stamps earmarked for the affordable housing Sadowski Trust Fund to actually go into the fund.
5. Fasten your seatbelts. Property insurance is a bumpy ride.
Lawmakers wrestled with a question that has been around for years: Should property insurance be affordable or available? If affordable, a major storm could bankrupt the state. If widely available, the cost could drive buyers away and hurt current homeowners. Citizens Property Insurance, the state-owned insurer, sits squarely in the middle of the debate since it covers most of the high-risk properties and, should a major storm hit, would force all Floridians to help pay for damages. To attract private insurers to the state and cut down on the number of owners under Citizens, Gov. Scott and lawmakers made changes. Sinkhole coverage became optional and much more expensive. Citizens dropped about 7,500 coastal homes in early December, and policy costs and rules are set to become even stricter in 2012. The uneasy balance between affordable or available insurance shifted a bit closer to the “available” side.
6. Facts at your fingertips: Florida Realtors adds research department
Florida Realtors Industry and Data Analysis Department (IDA) opened for business in June 2011. Designed to provide practical information for association members, Chief Economist Dr. John Tuccillo says the department will help Realtors in Florida deal more effectively with increasingly educated consumers. The services provided by IDA include current analyses of Florida’s real estate market and support for Florida Realtors’ public policy efforts in Tallahassee. IDA products are available to all members and can be found on the Research page of floridarealtors.org. “Members are free to pull down and use any information provided by IDA,” says Tuccillo.
7. HAMP, HARP, TARP do little for at-risk homeowners
Falling home values and risky mortgages caused more Florida owners to face foreclosure. The government created, and modified, a number of programs slated to help owners keep their homes, but most applied only to about half of those in trouble – owners who had mortgages held by Fannie Mae or Freddie Mac. Even then, however the carrots held out by HAMP, HARP, TARP and others didn’t entice lenders that feared principal cuts and long-term changes. The issue led to some strategic defaults – foreclosures where investors could afford to pay but walked away as a financial decision – court backups, and a system that allowed some non-paying owners to live in a home for over two years before authorities finally foreclosed. Analysts expect the problem to improve but continue in 2012.
8. Should we slow the recovery to avoid another crisis?
U.S. regulators have conflicting goals: Speed the recovery but, at the same time, take steps to make sure it never happens again. Unfortunately, it hasn’t figured out how to do both. While the federal government has tried to spark home sales through a number of programs (see No. 7 above), it has also created obstacles to homeownership by boosting mortgage rules, tightening appraisal standards and restricting the amount homeowners can deduct from federal taxes. A key concern of Realtors heading into 2012 is the qualified residential mortgage (QRM) rule – a minimum standard that mortgage loans must meet before Fannie Mae or Freddie Mac will consider buying them. Some lawmakers have suggested a 20 percent downpayment, a high standard that will force many buyers to wait years before they can afford homeownership. The discussion will continue in 2012.
9. Social networking goes from ‘cutting edge’ to ‘must do’
New technology no longer surprises Realtors, who have been inundated with “cutting edge solutions” that now allow them to post videos, track complete transactions stored in a “cloud,” sign contracts without actually signing anything and politely ask their phone to look up information. Social networking was once the realm of early-adopters, and Realtors sold it to clients as “look what I can do for you.” Now, Facebook, Twitter, YouTube, Goggle+ (new in 2011) and other social networking sites are standard in the real estate business. If you’re a Realtor, you have a Facebook page – it’s that simple.
10. 2011 Realtors are different than 2005 Realtors
The skills needed to sell a house have changed. Realtors spend a lot more time talking to banks, trying to find out what’s happening with a client’s short sale; asking what paperwork they needed to file or re-file; and understanding new laws that oversee what they can do – and can’t do – when working with short-sale sellers. Realtors learned to accept disappointment – sales that fell apart at the last minute; appraisals that came in lower than hoped; and clients who wanted a bargain below any reasonable expectations.
© 2011 Florida Realtors®
Tuesday, December 27, 2011
Tuesday, November 29, 2011
NAR: Commercial markets expected to grow in 2012
Lawrence Yun, NAR chief economist, says there is little change in most of the commercial market sectors. “Vacancy rates are flat, leasing is soft and concessions continue to make it a tenant’s market,” he says. “However, with modest economic growth and job creation, the fundamentals for commercial real estate should gradually improve in the coming year.”
The commercial real estate market is expected to follow the general economy.
“Vacancy rates are expected to trend lower and rents should rise modestly next year,” Yun says. “In the multifamily market, which already has the tightest vacancy rates in any commercial sector, apartment rents will be rising at faster rates in most of the country next year. If new multifamily construction doesn’t ramp up, rent growth could potentially approach 7 percent over the next two years.
Looking at commercial vacancy rates from the fourth quarter of this year to the fourth quarter of 2012, NAR forecasts vacancies to decline 0.6 percentage point in the office sector, 0.4 point in industrial real estate, 0.8 point in the retail sector and 0.7 percentage point in the multifamily rental market.
The Society of Industrial and Office Realtors, in its SIOR Commercial Real Estate Index, an attitudinal survey of 231 local market experts, shows the broad industrial and office markets were relatively flat in the third quarter, in step with macroeconomic trends. The national economy continues to affect the sectors, with 92 percent of respondents reporting the economy is having a negative impact on their local market.
Even so, the SIOR index, measuring the impact of 10 variables, rose 0.6 percentage point to 55.5 in the third quarter, following a decline of 2.6 percentage points in the second quarter. In a split from the recent past, the industrial sector advanced while the office sector declined.
The SIOR index is notably below the level of 100 that represents a balanced marketplace, but it had six consecutive quarterly improvements before the last two quarters. The last time the index reached the 100 level was in the third quarter of 2007.
Construction activity remains low, with 96 percent of respondents indicating that it is lower than normal; 88 percent said it is a buyers’ market in terms of development acquisitions. Prices are below construction costs in 83 percent of markets.
NAR’s latest Commercial Real Estate Outlook offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS Inc., a source of commercial real estate performance information.
Office Markets
Vacancy rates in the office sector are expected to fall from 16.7 percent in the current quarter to 16.1 percent in the fourth quarter of 2012.
The markets with the lowest office vacancy rates presently are Washington, D.C., with a vacancy rate of 9.3 percent; New York City, at 10.3 percent; and New Orleans, 12.8 percent.
After rising 1.4 percent in 2011, office rents are forecast to increase another 1.7 percent next year. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is projected to be 20.2 million square feet this year and 31.7 million in 2012.
Industrial Markets
Industrial vacancy rates are projected to decline from 12.3 percent in the fourth quarter of this year to 11.7 percent in the fourth quarter of 2012.
The areas with the lowest industrial vacancy rates currently are Los Angeles, with a vacancy rate of 5.2 percent; Orange County, Calif., 5.7 percent; and Miami at 8.4 percent.
Annual industrial rent should decline 0.5 percent this year before rising 1.8 percent in 2012. Net absorption of industrial space nationally should be 62.0 million square feet this year and 41.2 million in 2012.
Retail Markets
Retail vacancy rates are likely to decline from 12.6 percent in the current quarter to 11.8 percent in the fourth quarter of 2012.
Presently, markets with the lowest retail vacancy rates include San Francisco, 3.7 percent; Long Island, N.Y., and Northern New Jersey, each at 5.7 percent; and San Jose, Calif., at 6.0 percent.
Average retail rent is seen to decline 0.2 percent this year, and then rise 0.7 percent in 2012. Net absorption of retail space is seen at 1.2 million square feet this year and 13.5 million in 2012.
Multifamily Markets
The apartment rental market – multifamily housing – is expected to see vacancy rates drop from 5.0 percent in the fourth quarter to 4.3 percent in the fourth quarter of 2012; multifamily vacancy rates below 5 percent generally are considered a landlord’s market with demand justifying higher rents.
Areas with the lowest multifamily vacancy rates currently are Minneapolis, 2.4 percent; New York City, 2.7 percent; and Portland, Ore., at 2.8 percent.
Average apartment rent is projected to rise 2.5 percent this year and another 3.5 percent in 2012. Multifamily net absorption is likely to be 238,400 units this year and 126,600 in 2012.
© 2011 Florida Realtors®
Thursday, November 10, 2011
You Better Protect Your Check!
With the daily advances in technology to make our lives simpler, comes new and clever ways to scam the system.
Recently, several banks have introduced systems to allow you to deposit your checks using an app on your smartphone to scan the check for instant deposit to your account. How cool.... well, not if your business involves issuing checks to Customers or Clients.
Businesses BEWARE! A new issue has arisen where the payee deposits the check immediately using smartphone technology, then returns the check asking for another form of payment. This way, the 'scammer' gets paid twice.
The best way to stop this scenario from happening to you is to always keep checks securely locked away while in your place of business, and refuse to exchange them for another form of payment once the check has been issued and left the premises.
Recently, several banks have introduced systems to allow you to deposit your checks using an app on your smartphone to scan the check for instant deposit to your account. How cool.... well, not if your business involves issuing checks to Customers or Clients.
Businesses BEWARE! A new issue has arisen where the payee deposits the check immediately using smartphone technology, then returns the check asking for another form of payment. This way, the 'scammer' gets paid twice.
The best way to stop this scenario from happening to you is to always keep checks securely locked away while in your place of business, and refuse to exchange them for another form of payment once the check has been issued and left the premises.
Friday, October 14, 2011
Who's Holding Down the Real Estate Market?
In a market full of distressed properties, you'd think that the general market conditions and low balling investors are keeping prices stagnant. This is somewhat true, when it comes to homes in disrepair where cash or renovation loans are the only option for buyers, but what happens when a buyer uses a mortgage to acquire a move in ready home to be their primary residence?
Let me explain the scenario. I listed a short sale, single family home in north St. Petersburg for $80,000, fair market value from what I could see from the comps for a 3/2 1500sft block home. I was wrong. The International Valuation Standards defines market value as "the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion."
So this would mean that the fair market value would be whatever a willing buyer was prepared to pay for the house.
Within the 1st week of the house being on the MLS, we had 3 offers submitted, and all were owner occupants with FHA financing. Two of the offers were in excess of the asking price, and one offer was the clear successful offer at $88,000 plus seller paid closing costs at 3%, so an actual dollar amount offer of $85,360. As the sale was a short sale, we sent the offer over to the bank for their review and approval. The lender ordered their BPO (Broker Price Opinion), collated all of the sellers hardship package, and reviewed the file. On August 2nd 2011, we received the bank approval that they would accept the offer and collect $75k to satisfy the loan, rather than the approximately $190k that was owed on the house. At this stage, everyone is happy and we move forward to a successful closing. Or so you'd think.
The buyers lender ordered the appraisal for their underwriting and as the listing agent, I was to meet her at the property to grant her access. I was about 1 minute late as I pulled into the street and received a phone call from the appraiser asking where I was, at this point I realized that she is swamped with appraisal appointments and time was of the essence. I opened up the house and stepped aside so that she could do her job. As she was leaving she remembered that she needed to review the attic. I showed her the attic hatch, and as she didn't have a ladder, she stated that she'd just take a picture of the access hatch. 'No big deal' I thought.
About a week later, I received a phone call from the buyers Realtor with the news that the appraisal came in below value. In fact it came in $12,000 below contract value at $76,000.
We were both confused as to how it came in so low. Both of us agreed that it seemed to be a very low value, but we both knew that we must play the hand we're dealt and relay the full information to our clients for their decisions. I asked the buyers agent to send me a copy of the appraisal so that I could take a look at it - wondering how I was so far off with my valuation of the property.
Upon review of the appraisal I began to notice many inconsistencies and began to dig a little deeper.
Let me prequel this next part by saying that having been in the business for nearly 10 years, I understand that challenging an appraiser is pretty much impossible. You must provide 3 comps that they missed to justify your argument, and most appraisers don't miss substantial comparable properties. Most appraisals are accurate whether you like the result or not and are based upon facts; so you certainly can't challenge them based on your opinions.
Upon reviewing the appraisal on the subject property, I discovered a multitude of errors in the report. Not differences in opinion, actual errors based on facts. Facts that appraiser hang their reputations on.
So, now we have a neighborhood in north St. Petersburg FL, where most keep their yards nice and take pride in their homes; where one 'For Sale' sign generated about 30 calls in 2 weeks; where a home in move in condition procured multiple offers above listing price within a week of being on the market; that will show a large depreciation of value across the board. This sale of my listing sickens me. This sale will now be a comparable property for the next appraiser hired to value a home in the neighborhood, and will subsequently reduce its value.
Who actually determines the value of a home, and subsequently depreciates entire neighborhoods? You decide.
Let me explain the scenario. I listed a short sale, single family home in north St. Petersburg for $80,000, fair market value from what I could see from the comps for a 3/2 1500sft block home. I was wrong. The International Valuation Standards defines market value as "the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion."
So this would mean that the fair market value would be whatever a willing buyer was prepared to pay for the house.
Within the 1st week of the house being on the MLS, we had 3 offers submitted, and all were owner occupants with FHA financing. Two of the offers were in excess of the asking price, and one offer was the clear successful offer at $88,000 plus seller paid closing costs at 3%, so an actual dollar amount offer of $85,360. As the sale was a short sale, we sent the offer over to the bank for their review and approval. The lender ordered their BPO (Broker Price Opinion), collated all of the sellers hardship package, and reviewed the file. On August 2nd 2011, we received the bank approval that they would accept the offer and collect $75k to satisfy the loan, rather than the approximately $190k that was owed on the house. At this stage, everyone is happy and we move forward to a successful closing. Or so you'd think.
The buyers lender ordered the appraisal for their underwriting and as the listing agent, I was to meet her at the property to grant her access. I was about 1 minute late as I pulled into the street and received a phone call from the appraiser asking where I was, at this point I realized that she is swamped with appraisal appointments and time was of the essence. I opened up the house and stepped aside so that she could do her job. As she was leaving she remembered that she needed to review the attic. I showed her the attic hatch, and as she didn't have a ladder, she stated that she'd just take a picture of the access hatch. 'No big deal' I thought.
About a week later, I received a phone call from the buyers Realtor with the news that the appraisal came in below value. In fact it came in $12,000 below contract value at $76,000.
We were both confused as to how it came in so low. Both of us agreed that it seemed to be a very low value, but we both knew that we must play the hand we're dealt and relay the full information to our clients for their decisions. I asked the buyers agent to send me a copy of the appraisal so that I could take a look at it - wondering how I was so far off with my valuation of the property.
Upon review of the appraisal I began to notice many inconsistencies and began to dig a little deeper.
Let me prequel this next part by saying that having been in the business for nearly 10 years, I understand that challenging an appraiser is pretty much impossible. You must provide 3 comps that they missed to justify your argument, and most appraisers don't miss substantial comparable properties. Most appraisals are accurate whether you like the result or not and are based upon facts; so you certainly can't challenge them based on your opinions.
Upon reviewing the appraisal on the subject property, I discovered a multitude of errors in the report. Not differences in opinion, actual errors based on facts. Facts that appraiser hang their reputations on.
- Two of the comps used were valued based on having equal bathrooms to the subject property, so no adjustments were made. In actual fact, they only had one bathroom and should have been adjusted accordingly.
- One of the comp properties was in disrepair, and had no heating or A/C. The home was to the point of disrepair that no financing options were available to a buyer. The sale was a cash sale. No adjustments were made by the appraiser.
- One comp listed that the seller had contributed $10,000 towards the buyers closing costs. Upon investigation, I discovered that the actual seller contribution was about half of that amount at $5100.
- Two of the comps had pools, the subject does not. One of these comps was adjusted by -$2,000, and the other by -$10,000. This is a large difference in the opinion of value of a pool.
Aside from these errors, and the failure to include a substantial comparable property that would easily have justified the contract price, there was one other major issue with the appraisal report. The appraiser included a photo of the inside of the attic of the subject property. Remember earlier I mentioned how the appraiser did not access the attic, and just took a picture of the access hatch? Well now we have fraudulent documentation in a formal appraisal for a Government backed loan. The photo of the attic interior was not of the subject property, and the appraiser clearly states in the report that it is.
I took extreme exception to this appraisal. The value is what the value is; I have no problem with that, but at least do the seller, the buyer, the bank losing money on the short sale, and the neighbors of the subject property the courtesy of basing the value on FACT.
I tried to contact the appraiser by phone - no response. I emailed her with my concerns - no response (I did get a read receipt though). I emailed her again as I had not received a response - no response. The appraiser works for herself, so no way to speak to her boss. I contacted the loan officer for the buyers new loan - nothing he could do. So what do I do? I did the only thing that I should do as a Realtor; I presented all of the facts and information I had to my clients for them to make the decision to either fight the appraisal issues, or to reduce the contract price and resubmit the file to the sellers lender for a new short sale approval. As this was a distressed sale, and my clients wanted to move on with their lives, they opted to reduce the contract price and resubmit for a new approval.
The sellers lender requested a copy of the appraisal and issued a new approval on the short sale. Escrow closed on Friday 14th October 2011, for $74,000.
The appraiser is yet to acknowledge my calls and emails.
So, now we have a neighborhood in north St. Petersburg FL, where most keep their yards nice and take pride in their homes; where one 'For Sale' sign generated about 30 calls in 2 weeks; where a home in move in condition procured multiple offers above listing price within a week of being on the market; that will show a large depreciation of value across the board. This sale of my listing sickens me. This sale will now be a comparable property for the next appraiser hired to value a home in the neighborhood, and will subsequently reduce its value.
Who actually determines the value of a home, and subsequently depreciates entire neighborhoods? You decide.
Tuesday, October 11, 2011
Bank of America offers up to $20,000 to entice short sales
By Mark Puente, Times Staff Writer
Bank of America hopes the incentives will keep some homes out of foreclosure.
Bank of America is offering up to $20,000 to select Florida homeowners willing to agree to a short sale instead of entering foreclosure.
To sweeten the deal further, the nation's largest lender will consider waiving the deficiency on the loan, which allows homeowners to sell the house for less then they owe without having to make up the difference to the bank. It can save homeowners thousands of dollars.
Not every Bank of America customer in Florida will be eligible for the program, which pays a minimum cash incentive of $5,000. It's targeted toward homeowners who cannot afford their mortgages.
To quality, the short sales must be submitted for bank approval by Nov. 30 and must close by Aug. 31. Sales already under contract are not eligible; neither are properties outside of Florida.
This is a "test-and-learn" program being rolled out only in Florida because of the higher foreclosure rates than other parts of the country, said Christina Beyer Toth, a Tampa-based spokeswoman.
Florida is seen as a viable market to gauge short-sale response when presenting homeowners with relocation assistance, she said. If successful, the plan could expand to other states.
The bank notified select Florida real estate agents this week about the offer.
"It will get a lot of people off the fence about wanting to sell their home," said Steve Capen of Keller Williams Realty in St. Petersburg. "This makes sense."
What's in it for Bank of America? It saves attorney fees, court costs and property taxes by avoiding foreclosure. It also speeds the process of getting bad loans off its books and gets the properties back on the market faster.
Capen, who specializes in short sales, plans to heavily market the offer to clients. But he cautioned that homeowners shouldn't get overly excited because many of these plans have restrictions.
"It will only help a fraction of the people," he said.
Homeowners get the cash after the short-sale deal closes. A caveat: Homeowners might have to pay income taxes related to the deficiency waiver and the cash payout.
The cash payouts give homeowners a reason not to trash their homes or strip them bare before moving out. When houses enter foreclosure, homeowners can essentially live for free until banks take possession at the end of the court process, which takes an average of nearly two years in Florida.
Attorney Chris Boss of Yesner & Boss said the deficiency waiver will enable homeowners to buy a house without filing bankruptcy or waiting three years from when foreclosures become final.
"It's a chance to get away from the house with some money in your pocket," Boss said. "This is good for the economy."
Other national lenders started similar programs.
Late last year, JPMorgan Chase began giving homeowners $10,000 to $20,000 and waived losses on the mortgage. The bank still suffers a loss in the process, but generally speaking, sale prices on short-sale homes are higher than foreclosed homes.
Real estate experts and economists have said the housing market cannot fully recover until the millions of distressed mortgages are removed from the system.
Mark Puente can be reached at mpuente@sptimes.com or (727) 893-8459. Follow him at Twitter at twitter.com/markpuente.
.FAST FACTS
How it works
Here are details on Bank of America's "Short Sale Relocation Assistance" program:
. To determine eligibility, call a bank short-sale specialist at (877) 459-2852 between 8 a.m. and 10 p.m. Monday through Friday or Saturday from 9 a.m. to 5:30 p.m.
. The plan excludes loans backed by the Federal Housing Administration, Veterans Administration, U.S. Department of Agriculture and Ginnie Mae. Short sales initiated with offers are excluded.
. The specific amount of the payout will be based on the unpaid principal balance. The payoff assistance can be used to pay off other liens on the properties.
Source: Bank of America
To sweeten the deal further, the nation's largest lender will consider waiving the deficiency on the loan, which allows homeowners to sell the house for less then they owe without having to make up the difference to the bank. It can save homeowners thousands of dollars.
Not every Bank of America customer in Florida will be eligible for the program, which pays a minimum cash incentive of $5,000. It's targeted toward homeowners who cannot afford their mortgages.
To quality, the short sales must be submitted for bank approval by Nov. 30 and must close by Aug. 31. Sales already under contract are not eligible; neither are properties outside of Florida.
This is a "test-and-learn" program being rolled out only in Florida because of the higher foreclosure rates than other parts of the country, said Christina Beyer Toth, a Tampa-based spokeswoman.
Florida is seen as a viable market to gauge short-sale response when presenting homeowners with relocation assistance, she said. If successful, the plan could expand to other states.
The bank notified select Florida real estate agents this week about the offer.
"It will get a lot of people off the fence about wanting to sell their home," said Steve Capen of Keller Williams Realty in St. Petersburg. "This makes sense."
What's in it for Bank of America? It saves attorney fees, court costs and property taxes by avoiding foreclosure. It also speeds the process of getting bad loans off its books and gets the properties back on the market faster.
Capen, who specializes in short sales, plans to heavily market the offer to clients. But he cautioned that homeowners shouldn't get overly excited because many of these plans have restrictions.
"It will only help a fraction of the people," he said.
Homeowners get the cash after the short-sale deal closes. A caveat: Homeowners might have to pay income taxes related to the deficiency waiver and the cash payout.
The cash payouts give homeowners a reason not to trash their homes or strip them bare before moving out. When houses enter foreclosure, homeowners can essentially live for free until banks take possession at the end of the court process, which takes an average of nearly two years in Florida.
Attorney Chris Boss of Yesner & Boss said the deficiency waiver will enable homeowners to buy a house without filing bankruptcy or waiting three years from when foreclosures become final.
"It's a chance to get away from the house with some money in your pocket," Boss said. "This is good for the economy."
Other national lenders started similar programs.
Late last year, JPMorgan Chase began giving homeowners $10,000 to $20,000 and waived losses on the mortgage. The bank still suffers a loss in the process, but generally speaking, sale prices on short-sale homes are higher than foreclosed homes.
Real estate experts and economists have said the housing market cannot fully recover until the millions of distressed mortgages are removed from the system.
Mark Puente can be reached at mpuente@sptimes.com or (727) 893-8459. Follow him at Twitter at twitter.com/markpuente.
.FAST FACTS
How it works
Here are details on Bank of America's "Short Sale Relocation Assistance" program:
. To determine eligibility, call a bank short-sale specialist at (877) 459-2852 between 8 a.m. and 10 p.m. Monday through Friday or Saturday from 9 a.m. to 5:30 p.m.
. The plan excludes loans backed by the Federal Housing Administration, Veterans Administration, U.S. Department of Agriculture and Ginnie Mae. Short sales initiated with offers are excluded.
. The specific amount of the payout will be based on the unpaid principal balance. The payoff assistance can be used to pay off other liens on the properties.
Source: Bank of America
Thursday, September 22, 2011
Tampa Bay home sales rise 15 percent; prices remain soft
Existing home sales in Tampa Bay rose a strong 15 percent in August compared to a year ago, but housing prices have yet to rebound to last year's levels.
The median home sales price in the area was $130,000. While that's down 8 percent from the year-ago level of $140,600, it's up from $124,000 in July and continues to build on momentum throughout the year. Home prices had tumbled to a low of $110,000 in January.
"Over the past few months, it appears that home prices have been stabilizing in many local markets across the state," said Patricia Fitzgerald, Florida Realtors president.
The gap between home prices in the bay area and statewide widened slightly. Prices statewide rose to $137,500, up 2 percent from year-ago levels and up nearly 1 percent from July. Statewide, 16,206 homes changed hands, up 15 percent from August 2010.
Nationally, home sales rose 7.7 percent last month to a seasonally adjusted annual rate of 5.03 million homes. That's below the 6 million that economists say is consistent with a healthy housing market.
Fla.’s home, condo sales and median prices higher in August Sales higher in Aug. over year ago; home median price up 2%, condo median price up 12%. National existing sales up 7.7%.
ORLANDO, Fla. – Sept. 21, 2011 – Sales activity and median prices for Florida’s existing home and existing condo markets rose in August, according to the latest housing data released by Florida Realtors®. Existing home sales increased 15 percent last month with a total of 16,206 homes sold statewide compared to 14,131 homes sold in August 2010, according to Florida Realtors. The statewide median sales price for existing homes last month was $137,500, up 2 percent from the year-ago figure of $134,900. August’s statewide existing home median price was also slightly higher than it was in July.
“Over the past few months, it appears that home prices have been stabilizing in many local markets across the state,” said 2011 Florida Realtors President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “This is another positive sign that the housing recovery is gaining strength.”
According to analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in August 2011 was $168,400, down 5.4 percent from a year ago, according to NAR. In California, the August statewide median resales price was $297,060; in Maryland, it was $241,564.
Fifteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales in August; 15 MSAs also had higher existing condo sales.
In Florida’s year-to-year comparison for condos, 7,098 units sold statewide last month compared to 6,041 units in August 2010 for an increase of 17 percent. The statewide existing condo median sales price last month was $91,100; in August 2010 it was $81,500 for a 12 percent increase. According to NAR, the national median existing condo sales price was $167,500 in August 2011.
NAR’s latest industry outlook notes that despite high affordability conditions, sales activity is underperforming, partially as a result of overly restrictive lending standards.
“Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” said NAR Chief Economist Lawrence Yun. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.27 percent in August, down from the 4.43 percent average during the same month a year earlier. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
“Over the past few months, it appears that home prices have been stabilizing in many local markets across the state,” said 2011 Florida Realtors President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “This is another positive sign that the housing recovery is gaining strength.”
According to analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in August 2011 was $168,400, down 5.4 percent from a year ago, according to NAR. In California, the August statewide median resales price was $297,060; in Maryland, it was $241,564.
Fifteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales in August; 15 MSAs also had higher existing condo sales.
In Florida’s year-to-year comparison for condos, 7,098 units sold statewide last month compared to 6,041 units in August 2010 for an increase of 17 percent. The statewide existing condo median sales price last month was $91,100; in August 2010 it was $81,500 for a 12 percent increase. According to NAR, the national median existing condo sales price was $167,500 in August 2011.
NAR’s latest industry outlook notes that despite high affordability conditions, sales activity is underperforming, partially as a result of overly restrictive lending standards.
“Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” said NAR Chief Economist Lawrence Yun. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.27 percent in August, down from the 4.43 percent average during the same month a year earlier. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
© 2011 Florida Realtors®
Wednesday, September 21, 2011
House fails to vote on extending loan limits FHA, Fannie and Freddie loan limits to drop Oct. 1, but Congress could still consider higher limits before 2012.
WASHINGTON – Sept. 20, 2011 – Conforming loan limits on government-backed mortgages at Fannie Mae and Freddie Mac are set to expire on Oct. 1, because attempts to extend them haven’t gain traction in Congress.
In 2008, Congress raised the limits up to $729,750 in some areas to make larger mortgages available in high-priced housing markets. The limits will drop to $625,500 on Oct. 1 in the many areas of the country, mostly affecting housing markets on West and East Coasts.
The Conforming Loan Limits Extension Act introduced in July by Reps. John Campbell (R-Calif.) and Rep. Gary Ackerman (D-N.Y.) would allow GSEs and the Federal Housing Administration to purchase or guarantee mortgages worth as much as $729,750 in most areas. (Additionally, Reps. Brad Sherman (D-Calif.) and Gary Miller (R-Calif.) introduced a bill in May to make the loan limits permanent.)
Another bill, the Homeownership Affordability Act of 2011, introduced in August by Senators Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.), would keep the higher limits in place by increasing the guarantee fees charged on loans between $625,500 and $729,500. (Guarantee fees are charged by loan guarantors prior to bundling mortgages into securities.)
Neither the House nor the Senate has voted on any of the loan-limit extension bills, however. The Conforming Loan Limits Extension Act also failed to become part of a short-term spending bill, which will be voted on soon.
“We are focusing all of our effort and attention on making sure that a temporary extension of the current conforming loan limits is included in an omnibus spending bill that it appears the House and Senate will consider late this year,” said a spokesman for Rep. John Campbell (R-Calif.) who introduced the bill in the House.
The National Association of Home Builders has said it fears more than 17 million homes nationwide will become ineligible for more affordable federal funding if the loan limit expires. Federal Reserve Chairman Ben Bernanke has said he’s confident that the private market, including investors and insurers, would step up to fill the void by offering jumbo loans when the conforming loan limits expired – although likely at a higher cost to borrowers.
“We expect to see significant negative consequences for the struggling housing market as a result of the limit drop after Oct. 1,” Campbell’s office said. “Therefore, it will be even more pressing and pertinent that Congress acts quickly to reverse the limit reduction at the next opportunity.”
Source: “Extension of Conforming Loan Limits Fail in House,” HousingWire (Sept. 16, 2011) and “Senators Menendez and Isakson Call for Extending Higher Home Loan Limits to Boost Weak Housing Market,” Office of Sen. Johnny Isakson, R-Ga. (Sept. 16, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
In 2008, Congress raised the limits up to $729,750 in some areas to make larger mortgages available in high-priced housing markets. The limits will drop to $625,500 on Oct. 1 in the many areas of the country, mostly affecting housing markets on West and East Coasts.
The Conforming Loan Limits Extension Act introduced in July by Reps. John Campbell (R-Calif.) and Rep. Gary Ackerman (D-N.Y.) would allow GSEs and the Federal Housing Administration to purchase or guarantee mortgages worth as much as $729,750 in most areas. (Additionally, Reps. Brad Sherman (D-Calif.) and Gary Miller (R-Calif.) introduced a bill in May to make the loan limits permanent.)
Another bill, the Homeownership Affordability Act of 2011, introduced in August by Senators Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.), would keep the higher limits in place by increasing the guarantee fees charged on loans between $625,500 and $729,500. (Guarantee fees are charged by loan guarantors prior to bundling mortgages into securities.)
Neither the House nor the Senate has voted on any of the loan-limit extension bills, however. The Conforming Loan Limits Extension Act also failed to become part of a short-term spending bill, which will be voted on soon.
“We are focusing all of our effort and attention on making sure that a temporary extension of the current conforming loan limits is included in an omnibus spending bill that it appears the House and Senate will consider late this year,” said a spokesman for Rep. John Campbell (R-Calif.) who introduced the bill in the House.
The National Association of Home Builders has said it fears more than 17 million homes nationwide will become ineligible for more affordable federal funding if the loan limit expires. Federal Reserve Chairman Ben Bernanke has said he’s confident that the private market, including investors and insurers, would step up to fill the void by offering jumbo loans when the conforming loan limits expired – although likely at a higher cost to borrowers.
“We expect to see significant negative consequences for the struggling housing market as a result of the limit drop after Oct. 1,” Campbell’s office said. “Therefore, it will be even more pressing and pertinent that Congress acts quickly to reverse the limit reduction at the next opportunity.”
Source: “Extension of Conforming Loan Limits Fail in House,” HousingWire (Sept. 16, 2011) and “Senators Menendez and Isakson Call for Extending Higher Home Loan Limits to Boost Weak Housing Market,” Office of Sen. Johnny Isakson, R-Ga. (Sept. 16, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Monday, September 19, 2011
Pinellas County Real Estate Statistics August 2011
The housing market in Pinellas County for August has been relatively calm. It appears that the real estate market is looking for news of a recovery or a double recession. Listings across the board continue to fall, and prices are rising, albeit slowly. Distressed property (bank owned and short sales) listings have been steadily declining since January this year. Comparing to August 2010, they are down 43%.
Residential properties in the areas of $30k- $40k, $100k to $140k and $200k to $250k continue to be the strongest market price segments in the county. Sales on homes valued over $500k are continuing to struggle, with buyers looking for bargains rather than to move up.
Overall, residential market sales increased from 971 to 1203, or 23.9%, from August 2010 to August 2011. Median sales price for the same time period dropped 15.4% from $135,000 to $117,000, but is up $3,000 month over month. Active listings continued to slide by 22% from August 2010 to August 2011, for six straight months of listing decreases.
Condo sales from August 2010 to August 2011 are up nearly 26%. The median sales price for condo’s continues to remain relatively stagnate month over month. For August it is $94,200, a decrease of 18.1% from August 2010. Condo listings decreased from 5,546 to 4,222, or -23.9% for the same time period.
Single family listings are down from 6,670 to 4,270, or 37%. The median sales price is down from $135,000 to $126,080 from year over year. Single family sales climbed for a 22% increase for the same time period.
In the distressed market, pending sales of bank-owned properties and short sales ticked up about 7.3%. Median price and sales of distressed properties increased slightly.
With the decreasing number of listings, the absorption rate is steadily rising this year. For August 2011 the single family rate was 17.5%, the highest it’s been since December 2005.
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