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Fla.’s existing home, condo sales up March 2011
Existing home sales rise in March, says NAR
ORLANDO, Fla. – April 20, 2011 – Florida’s existing home and existing condo sales rose in March, according to the latest housing data released by Florida Realtors®. Existing home sales increased 12 percent last month with a total of 18,522 homes sold statewide compared to 16,540 homes sold in March 2010, according to Florida Realtors. Statewide sales of existing condos last month rose 24 percent compared to the year-ago sales figure.
Seventeen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home and existing condo sales in March; 17 MSAs also had higher condo sales. It’s the fourth consecutive month that Florida Realtors has reported higher year-over-year existing home and existing condo sales statewide.
“A variety of housing opportunities is available at attractive prices across the state, while mortgage interest rates remain historically low,” said 2011 Florida Realtors® President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “Favorable conditions like these spark the interest of buyers – who should consult a local Realtor to find out more about their local markets.”
Florida’s median sales price for existing homes last month was $126,300; a year ago, it was $136,000 for a 7 percent decrease. Analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in February 2011 was $157,000, down 4.2 percent from a year ago, according to NAR. In California, the statewide median resales price was $271,320 in February; in Massachusetts, it was $270,000; in New York, it was $245,000; and in Maryland, it was $208,258.
According to NAR’s latest industry outlook, a strengthening economy will continue to bolster the housing market’s slow recovery. “Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by unnecessarily tight credit,” said NAR Chief Economist Lawrence Yun.
In Florida’s year-to-year comparison for condos, 9,703 units sold statewide last month compared to 7,830 units in March 2010 for an increase of 24 percent. The statewide existing condo median sales price last month was $84,300; in March 2010 it was $94,800 for an 11 percent decrease. The national median existing condo sales price was $150,400 in February 2011, according to NAR.
The interest rate for a 30-year fixed-rate mortgage averaged 4.84 percent in March, down slightly from the 4.97 percent average during the same month a year earlier, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written
How can you beat a cash bidder?
NEW YORK – April 15, 2011 – Cash buyers are flooding the real estate market in record numbers to take advantage of bargain housing prices. But these buyers may put consumers who need financing at a disadvantage.
Sellers often prefer cash deals because it can mean faster closings and transactions that are less likely to fall through. Some sellers are even accepting lower offers because they are from cash buyers than higher offers from a financing buyer just because they view it as a more solid deal that will be quicker to the closing table.
So how can your financed buyers compete? Experts offer a few tips.
• Get pre-approved or pre-qualified for a mortgage. “The smartest thing they can do is make sure they talk to a competent mortgage banker … to pre-approve them ahead of time,” says Mike Litzner, broker and owner of Century 21 American Homes in New York.
• Show you’re in good standing. You’ll improve your chances of getting a seller to accept your bid by having more cash that you’re willing to put down, showing you have a stable job and good credit, Litzner says. Also, a well-prepared, typed-out contract that includes a cover page summary of the contract deals is another way to show you’re a serious buyer, says Dan Quinn, a real estate professional with Prudential Carruthers Realtors in the Silver Spring area of Maryland.
• Offer more earnest money. Offering a high downpayment and high deposit can also help improve your chances of beating out a cash bidder, Quinn says.
• Act quickly. “What I found out is with these cash buyers, they act quickly,” Quinn says. “To compete, you have to act quickly. A lot of times, these are investors and they have a relationship with these listing agents.” Buyers’ agents should develop rapport with the listing agents too, Quinn says.
Realize, however, that while some sellers may be highly motivated to accept a cash buyer’s offer, even if it’s lower than others, sellers with more equity in their homes may be less wooed by lowball cash offers, says Donne Knudsen, a mortgage loan originator with Cobalt Financial Corp. in Los Angeles. Instead, sellers who still have equity in their homes likely will be more motivated by the best and highest offer, since closing quickly may not be as critical to them, she says.
Source: “How to Beat a Cash Bidder in the Housing Market,” MarketWatch (April 13, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Fannie Mae: 3.5% buyer closing assistance
WASHINGTON – April 14, 2011 – Buyers purchasing a Fannie Mae-owned home may receive up to 3.5 percent of the final sales price for closing cost assistance if they close before June 30, 2011. Offers previously submitted (before April 11) do not qualify, and the offer is not extended to investors – buyers must use the home as their primary residence.
All Fannie Mae-owned HomePath properties are listed on HomePath.com and most include detailed property descriptions, photographs, community and school information, and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing, which offers homebuyers an opportunity to purchase with as little as 3 percent down.
Fannie Mae has a federal charter and operates in America’s secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to homebuyers.
“Attracting qualified buyers to the market and reducing the inventory of vacant homes remains essential to stabilizing neighborhoods and helping the market recover,” said Terry Edwards, executive vice president of credit portfolio management for Fannie Mae.
© 2011 Florida Realtors®
Foreclosure money to help 40,000 Floridians
The Florida Housing Finance Corp. announced Tuesday it is expanding the federal Hardest Hit Fund statewide.
The $1 billion fund will help eligible homeowners make mortgage payments for up to 6 months. Homeowners must be unemployed or their housing cost must be 31 percent or more than their income. Delinquent homeowners who are now able to start making payments could also get help getting current on their loans.
First announced on Feb. 19, 2010, by the U.S. Department of the Treasury, the fund provides federal money to states hardest hit by the aftermath of the housing bust. To date, $7.6 billion has been allocated to 18 states and the District of Columbia.
In October, a pilot Florida program began in Lee County. The expanded statewide program will begin accepting website applications at 9 a.m. April 18.
Cecka Rose Green, spokeswoman for the housing group, said she recommends homeowners act quickly.
“A billion dollars sounds like a lot of money,” she said. “But there are hundreds of thousands of people who probably need help. The money will run out.”
Participants must be owners of single-family homes who are no more than 180 days delinquent on their mortgage payments.
The program will be slightly different than the pilot program in Lee County. Homeowners will now have to contribute at least $70 per month or 25 percent of their monthly income. The pilot program paid 100 percent of homeowners’ mortgage payments. And the assistance will only last up to six months now, down from 18 months.
Previously, homeowners were eligible for up to $35,000. The assistance amount is much lower now, though.
There will be two programs, one for the unemployed and one to help homeowners who’ve found work get caught up on payments.
The Unemployment Mortgage Assistance Program will provide up to $12,000 to pay monthly mortgage and escrowed mortgage-related expenses for up to 6 months, or until the homeowner can resume making mortgage payments.
The Mortgage Loan Reinstatement Payment Program will provide up to $6,000 to bring the homeowner’s mortgage current, if the homeowner is able to make mortgage payments.
Homeowners can apply for assistance through the Florida Finance Corporation website.
Watch out for scams
A number of areas report scam operations using the “The Hardest Hit Fund” name to take advantage of homeowners. To apply for aid money, refer only to the Florida Finance Corporation website.
TALLAHASSEE, Fla. – April 6, 2011 – About 40,000 struggling Florida homeowners may soon get federal help making mortgage payments in an effort to help stave off foreclosure.
Copyright © 2011 Tampa Tribune, Fla. Shannon Behnken. Distributed by McClatchy-Tribune Information Services
Flipping foreclosures becomes new game
MYRTLE BEACH, S.C. – April 5, 2011 – More investors are finding a sweet spot in flipping foreclosures, but it’s not the same type of house flipping seen during the real estate boom.
During the housing boom, investors would take advantage of skyrocketing real estate prices and loose lending regulations by buying a property, remodeling and then selling it for profit.
Today’s flippers buy at ultra-low prices – mostly in cash deals – and do mostly minor repairs, such as repainting, replacing appliances and sprucing up the landscaping. Their profits aren’t as large when they sell, but they may sell more properties in a year, says Penny Boling, the broker-in-charge of Century 21 Boling and Associates in Myrtle Beach.
The ‘street sweepers’
Keith Gamble has made foreclosure flipping a full-time job. He purchases properties at a monthly foreclosure sale and usually has about four properties at any given time.
“Some people’s bad fortune is other people’s opportunity,” Gamble says. “I know that sounds callous – I know people doing what I’m doing at the courthouse each month are there to take advantage of that opportunity, but I also feel we provide a backstop to the market.”
The flippers are often taking the neighborhood’s blight and helping to fix up the homes that had been badly trashed from the previous owner. Boling says the investors’ abilities to also pay cash will help the market get through the abundant foreclosures that are plaguing sales.
“They’re kind of like the street sweepers,” Boling says of the property flippers. “They’re part of the cleanup committee of this marketplace.”
Source: “Foreclosures offer new twist on old game: flipping houses,” RISMedia (April 4, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Vacation- and investment-home shares hold even in 2010
WASHINGTON – March 30, 2011 – The market share of vacation- and investment-home sales held steady in 2010, although the sales volume declined with the overall market, according to the National Association of Realtors® (NAR).
NAR’s 2011 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2010, shows vacation-home sales accounted for 10 percent of transactions last year while the portion of investment sales was 17 percent – both unchanged from 2009.
“Despite extraordinarily tight credit conditions for purchasing a second home, the market share for vacation and investment homes held steady,” says NAR Chief Economist Lawrence Yun. “A sizeable number of buyers made deals with all-cash offerings.”
All-cash purchases have become prevalent in the second-home market in recent years: 59 percent of investment buyers paid cash in 2010, as did 36 percent of vacation-home buyers.
With an overall decline in home sales during 2010, the volume of 543,000 vacation-home sales was down 1.8 percent from 553,000 in 2009. Investment purchases fell 7.8 percent to 867,000 in 2010 from 940,000 the previous year. Primary residence sales declined 5.6 percent to 3.81 million from 4.04 million in 2009.
Foreclosure or trustee sales accounted for 17 percent of investment purchases and 11 percent of vacation-home sales in 2010, compared with 5 percent of primary purchases.
“Second home buyers purchased more distressed homes at discount than did buyers of primary residences,” Yun says.
The median vacation-home price was $150,000 in 2010, down 11.2 percent from $169,000 in 2009, while the median investment-home price was $94,000, which is 10.5 percent below the $105,000 median in 2009. By contrast, the median primary residence price declined a relatively modest 4.5 percent to $176,700 last year from $185,000 in 2009.
The typical vacation-home buyer in 2010 was 49 years old, had a median household income of $99,500 and purchased a property that was a median distance of 375 miles from his or her primary residence; 31 percent of vacation homes were within 100 miles and 41 percent were more than 500 miles.
Investment-home buyers had a median age of 45, earned $87,600 and bought a home that was fairly close to their primary residence – a median distance of 19 miles.
“The fall in home prices has opened opportunities for more families to enter the second-home market – the median income of investment buyers today is lower than it’s been in recent years,” Yun says. While the median income of vacation-home buyers in 2010 is slightly above 2007 when it was $99,100, the median income of an investment-home buyer is 5.7 percent below $92,900 in 2007.
“Even if purchases are delayed due to economic circumstances, the underlying long-term demand – the desire for purchasing second homes – remains because people in their 30s and 40s will reach the prime age for buying and will drive the second-home market in coming decades as conditions permit,” Yun says.
Currently, 40.7 million people in the U.S. are ages 50-59 – a group that dominated sales in the first part of the past decade and established records for second-home sales. An additional 43.8 million people are now in the primary buying demographic of 40-49 years old, while another 40.4 million are 30-39.
Lifestyle factors continue to be the primary motivation for vacation-home buyers, with the desire for rental income driving investment purchases. Vacation homes were more likely to be located in a rural area, while investment homes were more likely to be in a suburban location.
“Vacation-home buyers want the property for their own personal use, with 84 percent saying the primary reason for buying was to use for vacations or as a family retreat,” Yun says. “Rental income generation was the primary motive for investment buyers. At the same time, nearly half indicated they sought to diversify their investments or saw a good investment opportunity.”
Thirty-four percent of vacation-home buyers said they plan to use the property as a primary residence in the future, as did 10 percent of investment buyers.
Twenty-one percent of investment buyers and 14 percent of vacation buyers purchased the property for a family member, friend or relative to use. “Some of these buyers purchase a home for their son or daughter to use while attending school,” Yun says.
Vacation-home buyers plan to keep their property for a median of 13 years while investment buyers plan to hold their property for a median of 10 years.
Thirty-six percent of vacation homes purchased in 2010 were in the South, 27 percent in the West, 19 percent in the Northeast and 15 percent in the Midwest; 3 percent were located outside the U.S.
The distribution of investment properties differed from vacation homes: 32 percent were in the South, 24 percent in the West, 21 percent in the Northeast and 20 percent in the Midwest; 3 percent were purchased outside the U.S.
NAR’s analysis of U.S. Census Bureau data shows there are 7.9 million vacation homes and 41.6 million investment units in the U.S., compared with 74.8 million owner-occupied homes.
NAR’s 2011 Investment and Vacation Home Buyers Survey, conducted in March 2011, includes answers from 1,895 usable responses about home purchases during 2010. The survey controlled for age and income, based on information from the larger 2010 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents.
NAR sells the report for $19.95 to NAR members and $149.95 for non-members.
The 2011 Investment and Vacation Home Buyers Survey can be ordered by calling (800) 874-6500, or online at www.realtor.org/prodser.nsf/Research.
© 2011 Florida Realtors®
February pending home sales rise
WASHINGTON – March 29, 2011 – Pending home sales increased in February but with notable regional variations, according to the National Association of Realtors® (NAR).
The Pending Home Sales Index (PHSI), a forward-looking indicator, rose 2.1 percent to 90.8, based on contracts signed in February, from 88.9 in January. The index is 8.2 percent below 98.9 recorded in February 2010. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.
“Month-to-month movements can be instructive, but in this uneven recovery it’s important to look at the longer-term performance,” says Lawrence Yun, NAR chief economist. “Pending home sales have trended up very nicely since bottoming out last June, even with periodic monthly declines. Contract activity is now 20 percent above the low point immediately following expiration of the homebuyer tax credit.”
Yun notes there could have been some weather impact in the February data. “All of the regions saw gains except for the Northeast, where unusually bad winter weather may have curtailed some shopping and contract activity.”
The PHSI in the Northeast fell 10.9 percent to 65.5 in February and is 18.4 percent below a year ago. In the Midwest, the index rose 4.0 percent in February to 81.1 but is 15.9 percent below February 2010.
Pending home sales in the South increased 2.7 percent to an index of 100.3 but are 5.3 percent below a year ago. In the West, the index rose 7.0 percent to 105.6 and is 0.6 percent higher than February 2010.
“We may not see notable gains in existing-home sales in the near term, but they’re expected to rise 5 to 10 percent this year with the economic recovery, job creation and excellent affordability conditions providing confidence to buyers who’ve been on the sidelines,” Yun says.
© 2011 Florida Realtors®
Vacation home sales surge higher
MIAMI – March 23, 2011 – Vacation home and condominium sales in Florida, Hawaii and other states hit hard by the housing downturn have posted dramatic gains.
In Miami, existing condo sales surged 58 percent during the year-over-year period ended in February; and statewide, condo and single-family home sales climbed 29 percent and 13 percent, respectively, due to low property prices and mortgage rates.
About 50 percent of these sales were cash purchases, and about 70 percent involved foreclosures or short sales.
“We’re even seeing instances in certain neighborhoods with multiple offers above asking price,” says Miami Realtors Chairman Jack Levine.
This means home prices continue to decline, with the median in Miami down 23 percent for single-family homes and 25 percent for condos from February 2010. However, prices are beginning to pick up on the Miami waterfront, where distressed sales accounted for only a fraction of transactions.
Source: HousingPredictor (03/23/11) Colpitts, Mike
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
First-time buyers prepare for best market in recent history
CAMPBELL, Calif. – March 22, 2011 – Inexperienced first-time buyers may not know if the time is right to make a move into real estate.
“It’s not about timing the market. It’s about time in the market,” says Steve Berkowitz, chief executive officer at Move Inc., the online company that oversees operation of Realtor.com. “Once you know how long you expect to own a home, look at the historical value performance of properties in the neighborhood. Be confident about your own job security, downpayment resources and tolerance for upkeep, as well as the lifestyle you want today and in the near term. Today’s housing market, especially for first-time buyers, makes it almost impossible not to think about the possibilities.”
To help first-time buyers decide if they’re ready, Move created a “reality checklist.”
Get your financial house in order
Before you decide to buy a home, make sure your credit is in good shape and repair any damage previously done. Know your credit score: Thirty-five percent of successful buyers recently reported they didn’t know their credit score when they went house shopping, according to a national survey fielded for MortgageMatch.com. Having enough money set aside for a downpayment is a key component. Also, don’t put all your money in the downpayment as other fees or unexpected expenses often arise after closing.
Don’t fall in love with a house you can’t buy
Find out how much you can afford, including how much money will be required for a downpayment and closing costs. Look for special loans available from FHA and government-sponsored loans for first-time homebuyers that reduce the amount of money required to get into a home.
Learn the lingo
Since first-time buyers are new to the market and will finance a significant portion of their purchase, it’s important to get familiar with the processes and terminology associated with home buying. Here are a few key terms from MortgageMatch.com:
• Bait Rate: Misleading mortgages with low rate promises and no contingencies generally for those with extraordinary credit. Rates are based on: credit, debt-to-income and loan-to-value ratios, the size and type of loan, property location and the day you lock your rate, etc. The loan isn’t locked until the application is accepted. By then, it may be too late to find a better rate from another lender.
• Basis Point: A term used in the mortgage industry, which simply means 1/100th of 1 percent.
• Closing Costs: The fees required to process and close your loan. They’re a cash obligation running from three to five percent of the purchase price. Motivated sellers might pay a portion of these costs.
• FHA: Federal Housing Administration, the federal government agency that oversees the U.S. housing market. FHA loans are loans insured by the U.S. Department of Housing and Urban Development.
• FRM and ARM: A fixed-rate mortgage loan (FRM) is a loan where your interest rate stays the same for the life of the loan. ARMs are adjustable rate mortgages with variable interest rates that fluctuate based on an agreed-upon index.
• GFE: The Good Faith Estimate (GFE) is a document explaining all costs involved in getting a loan.
• TIL: The Federal Truth-in-Lending Form is a document that spells out the costs and fees of the loan.
• Lis Pendens: An official notice that there is a pending lawsuit over real estate.
• Per Diem Interest: Interest you pay per day, from the day you close to the last day of the month.
• Underwriting and Underwriting Fees: Underwriting is a process the lender performs to qualify a borrower for a loan, and the fee is what you pay the lender at closing to cover evaluating the risk involved with loaning you money.
• Warranty Deed: A legal document guaranteeing the seller has a right to sell a property, which is very important if you are considering a distressed or discounted property.
If now isn’t the right time, prepare for your future purchase
If now isn’t the right time to buy a home, make a plan with a target date for when you expect to be ready. Improving your credit, paying down debt, stabilizing your work history and calculating exactly how much you can afford, are the best ways to prepare for your future home purchase. It’s also important to refrain from making any new large purchases or applying for new credit.
© 2011 Florida Realtors®
Florida attracts 2.8 million over decade
WASHINGTON – March 21, 2011 – New Census data show that Florida has registered its seventh consecutive decade of double-digit population growth. While the nation as a whole grew by 9.7 percent, the number of Sunshine State residents surged 17.6 percent as 2.8 million more people put down stakes here from between 2000 and 2010.
Demographers noted that Florida’s minority populations increased as well, with the number of Hispanics and African Americans swelling by 57.4 percent and 15.2 percent, respectively.
“When we look at how Florida grew, it was driven primarily by migration, particularly by domestic migration from other parts of the United States,” explained Kenneth Johnson, a senior demographer with the Carsey Institute. “That was an important force, although it did slow down at the end of the decade.”
The state’s population gains also materialized despite a high rate of unemployment coupled with a housing slump. The Census statistics reveal that almost 1.7 million new residential units were constructed over the past decade, for a total of 8.9 million; however, the number of vacant properties catapulted nearly 63 percent over the same time frame to 1.5 million from 603,760.
Source: New York Times (03/16/11) P. A20; Van Natta Jr., Don
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688