Metas
Naples Florida Real Estate News - 11/15/07
HOMEBUYERS - If homebuyers want a new home, it’s worth checking out the builder’s financial status early on. If a builder declares bankruptcy before closing, the deal probably won’t go through on time; and owners who recently closed could get hit with liens and face other problems. But financial troubles may be easy to spot. Personally, I have advised my clients not to consider the purchase of a new home to be constructed by small home builders in the Naples area.
STATE OF FLORIDA BUDGET - State economists forecast that Florida’s tax revenue will be down another $1 billion, mostly because of the prolonged housing slump. Combined with an earlier $1.1 billion shortfall that caused state spending to be slashed in a special session just weeks ago, the reduction represents 3 percent of Florida’s original $71 billion annual budget, which covers July 1 to June 30.
SUBPRIME LOANS - The White House released a statement yesterday announcing opposition to key parts of a bipartisan U.S. House bill aimed at curbing abusive mortgage-lending practices that have fueled a jump in foreclosures. A vote is scheduled for today.
Billions of dollars in mortgage losses reported during the third quarter could be a prelude to even bigger losses in the fourth quarter as two more financial institutions – Bear Stearns Cos. and HSBC Holdings PLC – warned of substantial writedowns on Wednesday. But on a hopeful note, some analysts say the market could actually be bottoming out. The bottoming out referred to is the writing down of losses on poor performing mortgages, as financial institutions become more aggressive in their evaluations of the mortgages. Unfortunately, the bottoming out can not be said of the volume of resales on the market.
Naples Florida Real Estate News - 11/14/07
REAL ESTATE TAXES - Now it’s the voters’ turn: Gov. Charlie Crist on Tuesday signed into law a bill that would implement real estate tax cuts, providing voters approve the proposed constitutional amendment in January.
PENDING HOME SALES - A modest recovery for existing-home sales is expected in 2008 as the impact of the credit crunch subsides, according to National Association of Realtor’s latest forecast. The Pending Home Sales Index, a forward-looking indicator based on contracts signed in September, rose 0.2 percent. It will be interesting when I have the pending sales for October for the Bonita Springs, Estero, and Naples areas with comparative data for previous years.
COMMERCIAL REAL ESTATE - National Association of Realtors announced the results of a commercial real estate survey yesterday, noting that practitioners “make big money.” The findings revealed that 18 percent earned $250,000 or more; 33 percent earned between $100,000 and $250,000; and 24 percent earned between $50,000 and $100,000.
FORECLOSURES - U.S. homeowners increasingly have trouble making their mortgage payments on time, but borrowers in metro areas of Florida, California and other once-booming housing markets account for the biggest spikes in foreclosure filings, according to RealtyTrac Inc.
PROPERTY MANAGEMENT The Federal Communications Commission on Tuesday issued a final order that effectively ends deals that make only one cable television company the exclusive provider for private developments, including “gated communities, mobile home parks, garden apartments and other centrally managed residential real estate developments.” The rule affects 30 percent of Americans. If your Naples, Bonita Springs or Estero homeowners association has a bulk cable contract, this maybe good news for you.
Naples Florida Real Estate News - 11/13/07
PROPERTY MANAGEMENT - If you are a residential property owner and looking to rent your residential property here is something that might help you or assist you with covering the carrying costs of your second or seasonal property. This could be an idea for real estate investors in vacational areas. The Internet is doing for vacation rentals what eBay did for merchandise sellers: For not much money, owners can now display their vacation properties to a worldwide audience of potential renters.
FORECLOSURES - One step forward; two steps back. Some Florida homeowners facing foreclosure are forced to use the only weapon they’ve got left to keep their home from being sold on the courthouse steps – they declare bankruptcy.
Naples Florida Real Estate News - 11/12/07
HOMEOWNERS INSURANCE - Florida’s persistent battle with insurers over rates and coverage is spreading to other states and could have an effect on insurance customers nationwide. Previously, it was noted that Louisiana is reviewing if an elaborate price-fixing scheme involving several large homeowner insurance companies.
CONSTRUCTION - On Friday, Florida homebuilder Levitt and Sons announced that the company and 37 of its subsidiaries filed Chapter 11 bankruptcy, impacting homebuyers who have put down deposits and new homeowners with liens. Construction has stopped, and it’s not yet clear “if or when previously postponed closings on completed homes will occur,” according to the company’s Web site.
MORTGAGES - E-Trade Financial Corp. said Friday the value of its holdings of securities backed by home mortgages has fallen significantly, and it expects to take “significant write-downs” in the fourth quarter. E-Trade also disclosed that the Securities and Exchange Commission has opened an “informal inquiry” into issues related to the company’s loan and securities portfolios.
MORTGAGE INDUSTRY As more homeowners default on their mortgages, some private mortgage insurers worry about their survival in the face of billions of dollars in claims. In the short term, however, regulators and analysts say they aren’t concerned about the biggest insurers staying in business.
INTERNATIONAL - The weakening dollar may be fueling increased interest from foreign investors in the U.S. housing market. Real estate industry analysts say that foreign investors increasingly support markets like Miami and San Francisco, which are feeling pressure from the slowdown.
Naples Florida Real Estate News - 11/09/07
HOMEOWNERS INSURANCE - In the campaign to get federal disaster insurance, a major battle has been won though the outcome remains iffy. The U.S. House yesterday passed a bill that would allow disaster-prone states to ban together for coverage. The Senate has to consider the bill, however, and Pres. Bush’s advisers have suggested a veto if it reaches his desk.
FLORIDA ECONOMY - State economists estimate how much tax income the state should expect, and then the Florida Legislature creates a spending budget based on their figures. Yesterday, these economists released their 2008 prediction, and it includes an estimated 3 percent drop in residential and commercial property values statewide. In my humble opinion, based upon figures here in Naples and Collier County, as well as, speaking with other REALTORS from around the state - the estimated drop of 3 percent in property values maybe optimistic.
MORTGAGE RATES - Rates on 30-year mortgages fell for the third straight week – to 6.24 percent – dropping to the lowest level in five months, according to Freddie Mac’s weekly nationwide survey. This is good news for those prospective buyers looking for 30 year fixed rate mortgages - the old stand-by.
MORTGAGES - Federal lawmakers have introduced a bill that would allow primary-residence mortgages to be modified in bankruptcy court. However, major lenders say it would lead to a flood of bankruptcy filings and force banks to charge higher mortgage interest rates to compensate for the added risk.
Naples Florida Real Estate News - 11/08/07
DEMOGRAPHICS - University of Florida research finds that Florida’s population grows by about 900 people per day; slightly less than the 1,100 per day a few years ago. Top counties by rate of growth, in order: Flagler, Sumter and Osceola. Top growing counties by number of new people, in order: Orange, Miami-Dade and Hillsborough.
HOMEOWNERS INSURANCE - Do insurance companies work together to maximize profits? Louisiana Attorney General Charles Foti says “yes,” and is suing Allstate, State Farm, Lafayette, USAA, Farmers Insurance Exchange and others, claiming they engaged in an elaborate price-fixing scheme following Hurricane Katrina. It will be interesting to see how this unfolds and the implications that it will have both on Louisiana home owners and insurance companies in the State of Florida.
SUBPRIME LOANS - Fallout from the subprime mortgage industry continued to wreak havoc on Wall Street Wednesday, as three big financial institutions – Morgan Stanley, Merrill Lynch and Citigroup – revealed new financial and legal problems.
HOMEBUYERS - Now is a good time to buy for many first-time homebuyers. “For people with good credit, who’ve shown some responsibility and have some income to work with, there’s plenty of money,” says Kevin Kubacki, a senior loan officer in Greenfield, Wis. The same is true in the southwest Florida areas, especially in the Lee County area.
Naples Florida Real Estate News - 11/07/07
CREDIT SCORES - Troubles in the mortgage market appear to be spreading to credit card and auto loans, in what some analysts are calling a consumer credit “contagion.” Many big banks say they’re seeing a shift in consumer behavior, including more people unable to pay off their debts, which could hurt their credit scores and ability to get home loans.
APPRAISALS - In the wake of a lawsuit filed last week by New York’s attorney general against eAppraiselT, real estate appraisers are saying that pressure to inflate home values comes with the territory. According to a recent nationwide survey, 90 percent of 1,200 appraisers revealed they had felt “uncomfortable pressure” to adjust property values.
BUSINESS CYCLES - Real estate is a cyclical industry with clear ups and downs – but does it have to be that way? Many financial giants go with the flow and repeat mistakes, leading to substantial dips and peaks that some analysts say could, conceivably, be evened out.
Naples Florida Real Estate News - 11/06/07
FORECLOSURES - U.S. House Democrats and Republicans continue to negotiate a possible compromise on legislation that would give bankruptcy judges more flexibility to alter mortgage terms for borrowers facing foreclosure.
Struggling homeowners seeking mortgage relief from their lenders say they are hearing a tough message: We can’t help you unless you first fall behind on payments. However, defaulting on a mortgage usually triggers other headaches for homeowners. The major headache is credit scores drop and credit card interest rates increase - interesting how the banks have consumers over the barrel!
COMMERCIAL - Citizens Property Insurance Corp. received approval yesterday to offer up to $2.5 million multi-peril commercial insurance coverage, which it plans to offer no later than Jan. 1, 2008. Also approved: a 15 percent rate increase for commercial wind-only policies.
ECONOMY - Former U.S. Federal Reserve Chairman Alan Greenspan said Tuesday that cutting excess home inventories in the U.S. is key to stabilizing the financial system at home and the rest of the world.
Naples Florida Real Estate News - 11/05/07
REAL ESTATE TAXES - Property owners want to know: How much will January’s property tax amendment, if it passes, impact the current housing market? Most experts agree it will help some, but a number of economists warn that Florida won’t see a sudden or dramatic turnaround.
ECONOMY - State economists crunch numbers and tell the Florida Legislature how much the state can expect to take in before lawmakers start figuring out the next year’s budget. On Friday, the economists announced a new outlook. The good news: The state’s real estate industry, they say, will not get any worse. The bad news: Recovery won’t arrive until 2009.
FORECLOSURES - Members of Congress pushed the Bush administration on Friday to accelerate efforts to stem a rising tide of home foreclosures. However. Treasury Undersecretary Robert K. Steel said that the administration was working “flat out” to deal with the crisis.
RETIREMENT HOUSING - For millions of Americans approaching retirement, a big part of their fortune may be tied up in something they might never want to sell: their homes. According to the Standard & Poor’s Case-Shiller index, the real value of a single-family house in the U.S. has more than doubled in 10 years, despite the recent drop in home prices.
What Do These Statistics Truly Mean?
Frequently, we hear or read about real estate statistics in the news media. What do these statistics truly mean?
The first premise of understanding the meaning of real estate statistics is that real estate is local. Local can be a town or city or possibly even a county. Each town, city or county’s real estate can and does perform differently from each other, as well as, from community, neighborhood or subdivision, as well as, historical turnover rates for an area. Historical turnover rates are indicative of stability and could explain less fluctuations in property values.
We have certainly heard the expression, “location, location, location” and think it means location is important. Yes, the location is important, but location is beyond just where the property physically exists. The first location, does mean the physical location. The second location deals with the schools that a property owner’s children will attend. It has been proven that locations where the better schools are attended have a better rate of appreciation and demand. The third location deals with the traveling distance to employment – the closer to employment the greater the demand.
The news media generally speaks of national statistics or on a state level, but rarely discusses the statistics of a particular town or city.
What are the important statistics a potential seller or buyer should seek in determining the best time to place their property on the market or make their next purchase.
The second premise of real estate is understanding the difference between list or ask price, what a seller wants for their property and market value, the price a knowledgeable buyer and seller are willing to complete a real estate transaction. Sellers can set their list or ask price at any price they think their property is worth. However, the closer to the estimated market value the ask or list price is generally the faster a property sells.
The third premise is the ownership of a property. There are distinct differences between ownership – single family (fee simple), condominium, cooperative, or timeshare. Knowing the differences is critical for determining if the statistics are important for your decision.
There are a number of statistics that a seller or buyer should be aware of in order to make a good decision about what they want to do. Any user of statistical information needs to know that seasonal fluctuations does impact these statistics and should be given such consideration.
Median price paid – this is the price where there are an equal number of transactions above and below this point. A year over year analysis is helpful for determining if the median price is up or down from a year ago. These can be either monthly, quarterly or annually. When a trend analysis is used in combination with this analysis, one can detect where the market prices are going. Under any real estate market condition, an untimely decision can be avoided, by knowing the median price trend rather than a snapshot.
Months of inventory – this is a measure of how many months it will take for the current listed properties to sell based upon a 12 month rolling average of close sales volumes. A neutral market – one in which neither the buyer nor seller is favored – is about six months of properties. More than six months favors the buyers, commonly called a buyers market, while less favors the sellers, commonly called sellers market. This is important to know if you will be in a favorable position or not for your potential transaction.
Pending sales – a pending sale is where a seller and buyer have agreed to transact the sale of a property. Sometimes called as under contract. At this time, the actual agreed upon sale price is not know to parties not associated with the transaction. Pending sales are a good indicator of increasing or decreasing real estate transactions as well as interpolating an estimate of the market values of properties. Increasing pending sales are an indicator of increased interest in the procurement of real estate, while the reverse occurs when the pending sales are decreasing. The time between agreement and closing can vary according to local real estate practices – generally it is estimated between four to eight weeks, in most parts of the country.
Closed sales – a closed sale is where a property has actually transferred ownership. This is generally measured as a volume – increasing signals a positive, while a decrease is a lack of interest in transacting real estate.
New listings – a new listing is any property that has a new listing agreement with a real estate agent, could include properties previously listed with another real estate agent. The importance of this statistic in the form of developing a trend. Trends where new listings are increasing can either indicate a real estate market heating up or one that is cooling. This statistic needs to reviewed in conjunction with months of inventory available and pending sales to develop a clear indication of the market.
There are some other statistics that can be used to evaluate a real estate market – average days on market, list price to sold price ratio, and expired listings. The average days on market measures the number of days from the date listed until the property receives a mutually agreement sales contract. It is important to know, if the average days on market calculation includes the contingency period for clearing contingencies. Contingencies could include such things as home inspections and loan approval. Such contingencies can add as much as 28 days to the average number of days on market, thus becoming a misleading statistic.
The list price to sold price ratio measures the difference between what the seller has the property listed at when the sales contract is agreed to and the actual price paid. Although this figure can be helpful to measure price flexibility, it can be distorted by properties sold where the seller pays for some of the buyers’ closing costs. The seller’s payment on behalf of the buyer can be included within the sales price of the property. However, it can also, measure the flexibility of sellers list prices for a particular neighborhood or subdivision.
Expired listings reflects those properties that failed to sell during the contracted listing period. Listings expire for one of the following reasons, over-priced, lack of promotion or lack of marketing. These properties could be re-listed with the original real estate agent and show as a new listing. Expired listings as a statistic maybe informational, but is more important when determining a list price or for preparing an offer to purchase.
Before selling or buying real estate, be sure to seek out the statistics directly related to the property and do not rely upon statistics which are general in nature.