Metas
Real Estate News 04/30/08
FEDS CUT INTEREST RATE
This afternoon the Federal Reserve cut the Fed Funds rate a quarter of one percent from 2.25% to 2.0%. The prime rate should follow with a drop of one-quarter percent from 5.25% to 5.0%. The rate cut will not affect fixed rate mortgages, however, those borrowers with home equity loans, a home equity line of credit, or adjustable rate mortgage (ARM) should see some relief in their monthly payments when the rate adjustment date occurs. This should be good news for those homeowners or investors facing financial difficulties with their payments.
In an interview with Bankrate.com Orawin Velz, senior director at the Mortgage Bankers Association, predicts "mortgage rates will not go too much higher this year. It’s going to be a slow-growth year, so we’re not looking for a big pickup in rates at all," she says. This is also good news for those thinking about making a real estate purchase in the near future.
FLOOD INSURANCE
It is recommended you should obtain flood insurance if you are a new homebuyer or existing homeowner without flood insurance, and do it tomorrow. Your lender may not require flood insurance, but the premiums are relatively inexpensive and rates are set by the federal government. It takes 30 days for a new policy to become effective, and signing up on May 1 would make your coverage effective on June 1 for the start of the rainy season. Naples, Bonita Springs, and Estero are located in an area of Florida which is sub-tropical in nature. As a sub-tropical we are subject to extended periods of heavy rains during thunderstorms or tropical depressions. Your homeowners insurance does not cover ground water. June 1 is also the start of the hurricane season.
HURRICANE INSPECTIONS
Speaking of hurricane season, in a recent survey of My Safe Florida Home participants found that 97 percent of homeowners in the program said the application process is easy, 80 percent had a good experience and 82 percent said they would recommend it to neighbors. By using the program you will discover improvements that your home might need to make it safer and as an added benefit, you might be able to save some money on your annual homeowners insurance.
FIRST TIME HOME BUYERS
Some programs for first-time buyers still offer slightly more lenient underwriting standards that make it easier to get into a home, or discounted interest rates that make homeownership more affordable. But it’s harder to find first-timer mortgages today.
MORTGAGE FRAUD
In light of Florida’s current real estate market and rapid rise in foreclosures, the state Senate Tuesday passed a second bill in as many years increasing the penalties for those convicted of mortgage fraud.
FLORIDA CONSUMER CONFIDENCE
Falling housing prices, tighter credit and rising gas and food costs caused Florida’s consumer confidence to drop four points to 66 in April. However, perceptions as to whether it is a good time to buy big-ticket consumer items rose three points, and housing prices have all but bottomed out, according to the survey director.
CREATOR OF MODERN MORTGAGES SAYS ‘FIX IT’
The current mortgage crisis is unique, and for the first time, investors from around the world had a financial structure that allowed them to easily invest in U.S. mortgages. But the man credited with developing this financial system that bundled mortgages and sold them as securities on Wall Street now says he supports U.S. Rep Barney Frank’s bill that would make lenders accept losses in exchange for government guarantees. "At this point in the crisis, those of us who are practitioners would take what we can get," says Lewis Ranieri, CEO of Ranieri & Co. "I wouldn’t turn down less because we need a re-performing program, which is what in effect the Frank bill is." Ranieri, who developed the securitization market while he worked at Salomon Brothers, also says he favors more regulation in the loan market. "The whole system could sell a person the biggest investment he ever had, his house, in an inappropriate structure," he says. "It makes no sense. It is on its surface patently nuts." Source: Reuters News
It seems as though Lewis Renieri missed the issue or safeguards when he developed the securitization market for mortgage securities. Maybe he should be endorsing programs or legislation which will recast interest rates for financial strapped homeowners or working with banks to efficiently and promptly address borrowers concerns when they realize they are facing financial difficulties - after all isn’t part of the pie (interest) better than no pie (foreclosures).
Real Estate News 04/29/08
FORECLOSURES
The number of homes in some stage of the foreclosure process rose again in the first quarter, according to RealtyTrac. And while Florida had a number of cities near the top of the list, California and Nevada landed the top spots. Stockton, Calif., ranked Number 1, with one out of every 30 homeowners in some stage of foreclosure in the first quarter.
COUNTRYWIDE
Bank of America Corp. will expand efforts over the next two years to help Countrywide Financial Corp. borrowers avoid foreclosure, a top bank executive said Monday, adding it would help at least 265,000 borrowers with $40 billion in problem loans.
CONSUMER CONFIDENCE
Consumer confidence fell 3.6 points in April, though most of the drop resulted from a decline in attitudes about current economic conditions. Expectations about conditions six months in the future remained relatively unchanged.
HOUSING MARKET
According to the United States Census Bureau, 2.9 percent of all U.S. homes - excluding rental properties - were vacant and for sale in the first quarter, compared with 2.8 percent in the fourth quarter of 2007, setting a new record. The United States homeownership rate remained at 67.8 percent in the first quarter.
Real Estate News 04/28/08
COUNTRYWIDE
Consumer advocates claim Countrywide has not been responsive enough to homeowners struggling to make mortgage payments, and that Bank of America needs to do more when it takes over the troubled lender. The Fed is currently investigating the allegation, as it must do under the law, to make sure consumers wouldn’t be harmed by the takeover. This should help with getting prompt responses for possible short sale situations as well.
FHA
New government data shows that claims on Federal Housing Administration mortgage insurance, which is backed by the government to prevent foreclosures, rose by 61 percent last year compared to five years ago. These payoffs allowed more than six in 10 homeowners who defaulted on FHA-insured loans to stay in their homes.
BUYERS AND SELLERS
It’s a good time to buy a home while inventory is high, mortgage rates continue to stay low and sellers are willing to negotiate. However, squeezed by high prices for gasoline, food and other products, worried about their jobs and rattled by talk of a recession, buyers are wary of large purchases right now.
Real Estate News 04/25/08
REAL ESTATE TAX AMENDMENT
Florida’s Taxation and Budget Reform Commission voted yesterday in favor of a constitutional amendment to decrease property taxes in exchange for higher sales taxes, providing it’s approved by 60 percent of voters in November.
FORECLOSURES
The Bush administration "strongly opposes" Democrats’ housing rescue package, an official announced yesterday, calling it a bailout that would expose taxpayers to excessive risk. Among other things, the plan would relax Federal Housing Administration standards for at-risk homeowners seeking an Federal Housing Administration loan.
MORTGAGE RATES
Rates on 30-year mortgages topped 6 percent for the first time in six weeks as financial markets grew more worried about rising inflation pressures.
HOUSING MARKET
And now for the heartwarming side of the housing bust: It’s helping some people buy homes that they couldn’t afford a couple of years ago.
SHORT SALES
What exactly is a "short sale"? The National Association of REALTORS may decide the answer at its meetings in May. Technically, it’s not a short sale until a bank agrees to accept less money than it’s owed for a mortgage loan, and that raises questions on how some listings should be presented in the Multiple Listing Services.
Naples Condo Market Conditions March 08
Market conditions and trends are important for both condominium buyers and sellers in determining their actions in the Naples real estate market, as well as, cyclical variations. The market conditions for Naples condominiums cover both the month of March 2008 and the first calendar quarter of 2008, ending March 31, 2008. The monthly analysis reflects activity during March with comparative data for the previous years of 2007 and 2006. The quarterly analysis covers the first three calendar months of 2008, therefore, giving a more comprehensive picture of the current market conditions and trends.
MARCH ANALYSIS
NEW LISTINGS:
New listings during the month of March 2008 totaled 664 condo units. In 2007 the total number of units is 856 and in 2006 the total number was 1067. The number of new listings for condos is lower than in the previous March’s shows a positive sign in the real estate market conditions. The affect of less condo listings enter the market will eventually cause the available inventory of condominiums to start to shrink. This can be seen by looking at the absorption rate based upon the current closed sales versus new listings, which equates to 3.2 months.
PENDING SALES:
The pending sales in March were 292 units, which exceeded the March 2007 number of 287 units and the March 2006 figure of 251 units. The March pending sales of 292 units is the highest monthly number since August 2005, where the pending sales were 325.
CLOSED SALES:
During March 207 condo units were closed. Lower than March 2007’s 217 and 2006’s 214 the decrease in volume is not significant. The number of closed sales is being affected by lenders using stricter guidelines in addition to the time to respond to possible short sale sales contracts. Looking back at the months of January and February the number of pending sales totaled 358 condominiums. Most real estate transactions from date the property goes under contract or pending, the transaction closes between 30 and 60 days with an average of 45 days, so the number of closed sales appears to be fairly good.
MEDIAN SOLD PRICE:
The median price of a Naples condo sold in March was $279500 versus $310000 in March 2007 and $366500 in March 2006. The price reduction between 2008 and 2007 is 9.8%, while it is 23.7% between 2008 and 2006.
INVENTORY:
Currently there are about 5586 condominium units on the market for sale; a slight increase over February’s 5582 units. The months of inventory for sale are about 36 months versus 37 months in February. This is another positive sign of the condominium real estate market changing.
QUARTERLY ANALYSIS
NEW LISTINGS:
During the first quarter of 2008 a total of 2401 condos were listed for sale. This compares very favorably to the 3087 condominiums placed on the market during the first quarter of 2007 and extremely favorably to the 3565 units in 2006. In addition the first quarter of 2008 had less new listings than the second and fourth quarters of 2006. Based upon the quarterly closed sales and new listings the absorption rate is 4.8 months.
CLOSED SALES:
During the first quarter of 2008 a total of 505 condominiums were sold, while 482 condos sold in 2007 and 595 in 2006. Other than the second quarter of 2007 the volume of closed has been the highest since the second quarter of 2006.
MEDIAN SOLD PRICE:
During the first quarter of 2008 the median price paid for a Naples condominium was $300000 versus $325000 in the first quarter of 2007 and $377500 in the first quarter of 2006. The price decline as a percentage is 7.7% between 2008 and 2007, while between 2008 and 2006 the percentage is 20.5%. The median price for the most current three quarters has been increasing from $275000 in the 2007 third quarter and $290000 in the fourth quarter. Three straight quarters of the median price increasing maybe a sign that the prices are bottoming out or have bottomed out and should be watched especially by buyers as well as sellers.
If you have any questions please do not hesitate to either post them as a comment or e-mail me.
Naples Home Market Conditions March 2008
The market conditions for Naples covers both the month of March 2008 and the first calendar quarter of 2008, ending March 31, 2008. A monthly analysis reflects activity during a month with comparative data for the previous years of 2007 and 2006. The quarterly analysis covers a longer period of time, therefore, giving a more comprehensive picture of the current market conditions and trends. Trends are important for both buyers and sellers in determining their actions in the Naples real estate market, as well as, cyclical variations.
MARCH ANALYSIS
NEW LISTINGS:
During the month of March a total of 698 homes were listed for sale. The 698 homes listed were lower than March 2007 and 2006, where the total homes listed were 959 and 1100 respectively. The number of home listed in March, other than December 2007 (670), is the lowest volume of new listings since October 2005. The effect of less listings coming on the market is starting to be reflected in the total number of homes available for sale as March is showing 6016 versus 6186 homes in February. Although a slight decline, it is a positive sign for market improvement.
PENDING SALES:
The number of homes where purchase contracts were negotiated was 308. During March 2007 a total of 274 homes were pending sale – March 2008 was an increase of 34 homes or a 12.4% increase. In March 2006 the pending sales totaled 347 homes. The 308 pending sales for March represent the highest number of pending sales since March 2006 where 347 were under contract. One has to go back to August 2005 (323) to find a higher volume of pending sales.
CLOSED SALES:
During the month of March 169 were sold versus 213 in 2007 and 302 in 2006. To the casual observer the number of closings during March may not appear optimistic, however, there are some factors which must be considered – lenders have much stricter underwriting guidelines, fewer liberal loan programs, and the length of time needed to obtain lender approval for possible short sales.
MEDIAN SOLD PRICE:
In the month of March the median price paid a Naples home was $365000. In 2007 the median price was $495000 and in 2006 $489101. The median has declined approximately 26.3% between 2008 and 2007, while from 2006 it is a decline of 25.4%.
INVENTORY:
As stated earlier, there are 6016 homes currently on market which represents about 37 months of inventory to be sold.
QUARTERLY ANALYSIS
NEW LISTINGS:
The number of homes listed during the first quarter of 2007 totaled 2834 while the first quarter of 2007 was 3369 and 2006 was 3576. If one were look at the trend for the previous 3 calendar quarters, it would show an increasing trend line, but it needs to be looked at more critical since the month of January is the highest month for listings.
CLOSED SALES:
In the first calendar quarter of 2008 a total of 437 homes were closed. The closed sales were lower than 2007 with 500 closed sales and 2006 with 688. The implications of lenders’ actions are reflected within the lower volume of closed sales. The closed sales for the first quarter of 2008 are the second lowest starting with the second quarter of 2005. The lowest volume of 406 was during the fourth quarter of 2007.
MEDIAN SOLD PRICE:
The median sold price for a home in Naples during the first quarter was $400000 versus the median prices of $499500 in 2007 and $499275 in 2006. The decline in the median price is about 20% from the previous two first quarters. The median price paid trend line over the immediate five calendar quarters shows a decline, however, the most recent three quarters shows only a 4.4% decline. This could a sign of the market approaching or at the bottom. One does not truly know the bottom of the market until after it passes.
In summary, the real estate market is showing some positive signs where the new listings are decreasing, pending sales are increasing, and median prices are relatively stable over the past three quarters. The negative signs are the lower volume of closed sales and the number of months of inventory for homes for sale.
If you have any questions please do not hesitate to either post them as a comment or e-mail me.
Real Estate News 04/24/08
REAL ESTATE TAXES
The Florida House passed a stringent tax-cut package along party lines, but faces long odds in getting the Senate to agree to cuts that would dig into local government and school budgets.
NEW HOME SALES
New home sales were down again in March by 8.5 percent, with the median price 13.3 percent lower than in March 2007.
HOMETOWN DEMOCRACY
A Florida Court of Appeal yesterday overturned a law allowing voters to revoke their signature from a petition signed in favor of the Hometown Democracy anti-growth amendment. Opponents of the amendment plan to appeal the decision. No matter what the outcome, though, the Hometown Democracy Amendment will not appear on the November ballot.
Computer Tip - today I this great resource for computer users on the Sellius Blog - you might want to check it out - 529 Computer Tips from PC Magazine. Thanks for the great article, Joe Ferrara.
Real Estate News 04/23/08
HOMEOWNERS INSURANCE
It’s a do-over: Allstate Corp. is preparing for both favorable and unfavorable rulings on its ability to conduct new business in Florida after an appeals court erroneously released a decision late Monday that could have meant trouble for the insurer. The real ruling is expected Tuesday.
SUBPRIME MORTGAGES
Efforts to help struggling borrowers are falling short, according to a report from the State Foreclosure Prevention Working Group, which found that 70 percent of homeowners at least two months behind on their mortgage payments still aren’t getting help. The number of homeowners facing foreclosure has increased 16 percent, partly based on slow assistance from lenders, according to the report.
INSURANCE ADJUSTERS
Public adjusters: Defenders of homeowners or opportunists who milk the system? While many property owners credit public adjusters with saving their home, critics claim that adjusters pressure homeowners to submit less-than-legitimate claims. In response, a handful of bills in the Florida Legislature would create new oversight rules.
Real Estate News 04/22/08
HOME SALES
Florida Association of Realtors statewide reported slight gains in existing home and condominium sales from February to March 2008, according to Florida Association of Realtor’s latest housing statistics. A total of 9,142 existing single-family homes changed hands in March, a 10 percent increase over the previous month. Statewide existing condo sales totaled 3,145 in March, up 13.7 percent compared to February’s sales. Tomorrow market updates for Naples, Bonita Springs, and Estero will be posted.
HOMEOWNERSHIP
The American Dream lives. According to a survey from America On Line Real Estate and Zogby International, 31 percent of respondents believe their home is worth more than it was a year ago, and 56 percent do not think their home will be worth less in five years; 69 percent consider real estate to be a viable investment.
SUBPRIME MORTGAGES
A leading plan in Congress would make it easier for an at-risk homeowner to get an Federal Housing Administration - backed mortgage. If enacted as written, total monthly debt obligations could rise to 50 percent (or 55 percent at Federal Housing Administration’s discretion) of monthly income, and a poor credit score or past delinquencies cannot by themselves disqualify a homeowner.
JUMBO LOANS
Jumbo loans have been tainted by the subprime mortgage crisis even for borrowers with good credit. Twelve months ago, only a quarter point separated jumbo rates from conventional mortgage rates; but today, the difference is more than 1.5 points.
ALLSTATE
Allstate’s 1,100 insurance agents in Florida are still in business, thanks to a mistake by Florida’s 1st District Court of Appeal. The court issued an order denying Allstate’s appeal of a suspension but quickly withdrew it "due to clerical error."
Real Estate News 04/21/08
HOMEOWNERS INSURANCE
Headed into the final two weeks of the legislative session, several property insurance bills winding through the state House and Senate are like hurricanes - they’re moving slowly, gaining speed and could hit homeowners hard.
FEDERAL REGULATION
Many conservatives now think the government needs to get more involved in regulating the financial aspects of the housing industry, even if it goes against their philosophical position concerning limited government interference in business and individuals’ lives.
HOUSING AND URBAN DEVELOPMENT
President Bush on Friday chose Small Business Administration Administrator Steve Preston to take over as head of the government’s housing agency at a time of crisis in the industry. Democrats praised him as a problem-solver.
HEALTH INSURANCE
The Florida House early Saturday passed a massive plan to make affordable, bare-bones health insurance available for Floridians. A less wide-ranging proposal has already passed the Senate, and now the two groups must work out their differences before sending a final proposal to Govenor Charlie Crist.