Metas
Naples Real Estate News 03/20/08
MORTGAGES - So if the Fed keeps lowering interest rates, why don’t fixed mortgage rates drop more? Blame the investors who buy packages of mortgages on Wall Street. Those who are buying packages of mortgages are looking to recover their losses from mortgages which have fallen into short sales or foreclosure. In addition, to investors - you are look at the banks. For potential buyers of Bonita Springs, Estero or Naples real estate might find a better terms or interest rates by checking out some of the smaller local banks.
2008 FLORIDA LEGISLATURE - The tax cut that voters will be asked to approve in November will do more than save property owners money. It will force lawmakers to do what they have refused to do for nearly 70 years: modernize sales-tax rules.
POPULATION GROWTH - Collier County (Naples) had a population of 251,377 in 2000 and that population grew to 315,839 as of July 2007, a 25.6 percent increase.But between 2006 and 2007, Collier only grew from 313,167 people to 315,839, a percentage increase of 0.9 percent.
Lee County (includes the areas of Bonita Springs and Estero) grew by 33.9 percent from 440,888 in 2000 to 590,564 in 2007. Lee grew by 20,475 people between July 2006 and July 2007, adding more residents than any other Florida county.
Other Florida counties continue to grow but at a slower pace than some counties elsewhere in the nation. Flagler County continued to lead the state in the percentage of growth at 7.2 percent, though it dropped to sixth place nationwide. Broward County’s population fell by 13,000 over the one-year period.
SEX OFFENDERS - A Florida home buyer’s lawsuit claims he should have been told about a sexual predator living next door before the purchase, and attorneys for both sides agree that the court’s decision could establish a precedent in Florida, since the state has no existing statutes or existing case law. It’s a problem faced by a number of states.
HOME BUYERS - The attitudes of today’s buyers even though it’s a buyer’s market, citing the backlog of houses on the market, sellers report an increase in the number of buyers who are out of control. Some buyers browbeat them at every step in the process.
Naples Real Estate News 03/19/08
REAL ESTATE TAXES - If real estate taxes drop 25 percent through an amendment appearing on the November ballot, schools would need at least $8 billion from an alternate source. That raises the possibility, once again, of a sales tax on services, which could be levied on everything from lawn mowing to accounting.
HOMEOWNERS INSURANCE - Florida’s budget crisis has taken center stage this legislative session, but at least some issues surrounding property insurance should get a hearing. Different proposals have been suggested, but most follow the same philosophy: Get tougher on insurers. If you have a homeowners insurance policy on your Bonita Springs, Estero, or Naples residence, be sure to shop around for the best coverage and premiums - you might be surprised to find out the savings on your annual premium.
MORTGAGES - The government injected an additional $200 billion of financing for home loans today by relaxing capital requirements at Fannie Mae and Freddie Mac. The freed-up money will go toward buying mortgages of struggling homeowners.
ECONOMY - Wall Street storms higher after a three-quarter-point rate cut from the Fed and stronger-than-expected investment bank profits. However, the Commerce Department said home construction fell in February: housing starts fell 0.6 percent, while building permits were down 7.8 percent.
Naples Real Estate News 03/18/08
REAL ESTATE TAXES - Under a plan approved by the Florida Taxation and Budget Reform Commission Monday, voters will have a chance in November to approve an across-the-board property tax cut averaging 25 percent. The measure also includes a provision giving businesses, second homes and other properties that do not qualify for a homestead exemption a 5 percent cap on annual tax increases. The proposal does not include a mandatory services tax; business groups successfully argued to remove the services tax provision several weeks ago.
INTEREST RATES - The Federal Reserve is expected to lower interest rates by between one-half to a full percentage point when it meets today as part of its battle against the credit crisis and spreading economic weakness. According to Treasury Secretary Henry Paulson, the focus of policymakers "is reducing the spillover into the real economy from the turbulence and disruptions in our financial markets."
ECONOMY - The Federal Reserve meets today to consider another deep cut in the short-term lending rate that influences many consumer and business loans; however, concern is growing that even policymakers’ most aggressive efforts may not be enough to ease the global credit crunch.
FANNIE MAE, FREDDIE MAC - A deal could be in the works with Office of Federal Housing Enterprise Office, the federal regulator that oversees Fannie Mae and Freddie Mac, that would give the two government-sponsored enterprises more financial leeway. Though not yet finalized, the plan would allow Fannie Mae and Freddie Mac to reduce the cash cushion they’re required to maintain, thus freeing up money they would use to buy mortgages of struggling borrowers, who then could refinance into more affordable loans.
REAL ESTATE SETTLEMENT PRACTICES ACT (RESPA) - The public comment period for Housing and Urban Development’s (HUD) proposed RESPA reform ends May 13, though some mortgage trade groups insist more time is needed for review. According to HUD, borrowers would save an average $518 to $670 per transaction, or $6.5 billion to $8.4 billion per year overall, if the new rules are put into place.
Naples Real Estate News 03/17/08
HOME VALUES - The real estate mantra of "location, location, location" rings particularly true in a slow market. Buyers should do their research, because choosing the right neighborhood could have a big effect on whether or not their home turns out to be a winning investment. Key item to look for is the number of possible short sale, pre-foreclosures and foreclosed properties on the market within a neighborhood or complex. Sellers, if possible, should consider not listing their property as the previous mentioned types of properties, could cause their property’s value to be artificially lowered. Rumor has it that lenders are requesting appraiser not to use "distressed" properties as comparables when completing an appraisal and allowing properties further away from the subject property to be used. Guess it is time to review where "distressed" properties are located in Bonita Springs, Estero and Naples areas.
REAL ESTATE TAXES - Florida’s Taxation and Budget Reform Commission, which has the ability to put constitutional amendments directly on the November ballot, will discuss and vote on three property tax plans today in Tallahassee. Each of the plans would reduce property taxes by at least a third for all property owners, and could save taxpayers statewide between $7 billion to $8 billion a year.
MORTGAGE MARKET - As the damage from the credit crisis spreads and the bad news continues (think cash-strapped Bear Stearns) the Federal Reserve’s attempts so far to alleviate the problems - including a series of interest rate cuts and steps to inject hundreds of billions of dollars into the banking system - have had only short-term benefits. And investors are questioning how much the Fed ultimately can do.
REAL ESTATE INVESTING - The housing markets in college towns have remained relatively stable in the current slowdown, with students, university employees and faculty forming a steady stream of renters and homebuyers. Foreclosures are more common farther away from the University of Florida campus in Gainesville, for example, and finding a good investment property close to campus is difficult because sellers are few and prices are relatively high, says a Gainesville REALTOR®.
Real Estate News 03/14/08
MORTGAGE RATES - Rates on 30-year mortgages increased this week for the fourth time in the past five weeks, rising to an average of 6.13 percent, up from 6.03 percent last week, according to Freddie Mac’s weekly nationwide survey.
HOMEOWNERS INSURANCE - A Florida Senate panel charged with studying Florida’s property insurance troubles - and why rates did not drop as hoped last year - delivered its findings and recommendations to lawmakers yesterday. One discovery: Computer models used to estimate future losses must be approved by the state, but some companies modified them later.
GOOD FAITH ESTIMATES - Prospective home buyers would get easier-to-understand information on mortgage terms and save an average $700 in closing costs under a proposal to be unveiled Friday by President Bush.
If you are considering making a real estate purchase in the Bonita Springs, Estero or Naples areas be sure to obtain a good faith estimate from the loan officer or mortgage broker. Comparison shopping can save you literally thousands of dollars over the life of the mortgage as well as a better Annual Percentage Rate.
HOMEOWNERSHIP - Govenor Charlie Crist’s Florida HOPE Task Force will meet March 19 in Tallahassee, where task force members will accept public comments on Florida’s foreclosure rate, and its impact on the state’s economy. The group’s goal is to "provide real solutions for Florida’s families and our state’s economy," according to Lieutenant Governor Jeff Kottkamp, task force chairperson.
MORTGAGE FRAUD - Florida ranked number one in the country for mortgage fraud for the second year in a row, according to a report released by the Mortgage Asset Research Institute and an industry group of the nation’s biggest lenders. Lenders reported more than twice the number of suspected fraud cases in Florida than would otherwise be considered average, based on the number of loans originated here in 2007.
Real Estate News 03/13/08
HOMEOWNERS INSURANCE - If a homeowner insured by Citizens Property Insurance Corp. could get a lower rate by going with a private insurer, his insurance agent must tell him - a new rule ordered yesterday by state regulators. Recommendation - call your insurance agent and check to see if you can get a lower rate for your Bonita Springs, Estero or Naples home.
FHA LOANS - Expect more lenders to offer FHA loans. The government reports an upswing in the number of lenders applying for FHA licenses as an increasing number of borrowers show an interest in the product.
FORECLOSURES - Nearly 60 percent more United States homes faced foreclosure in February than in the same month last year, with Nevada, California and Florida showing the highest rates. In Florida, 32,447 homes reported at least one filing, up more than 69 percent from February 2007 and up more than 7 percent from January, according to California-based RealtyTrac Inc.
Naples Real Estate News 03/12/08
HOMEOWNERS INSURANCE - The number of homeowners insured by state-run Citizens Property Insurance Corp. is expected to grow despite efforts to turn over policies to the private market. And though its surpluses are expected to increase, Citizens could see a loss six times as great as its surpluses if a major storm hits the state, Citizens Chief Financial Officer Sharon Binnun said Tuesday. You should shop for your homeowners insurance, if you own a residence in the Bonita Springs, Estero, or Naples areas, to insure you have the lowest possible annual insurance premium. Taking the time to compare policies could save you thousands of dollars on your insurance premiums.
MORTGAGES - As mortgage defaults rise, many lenders are adjusting their standards by raising minimum credit scores, offering smaller loans and requiring detailed proof of income and assets. But for borrowers who do meet the tightened criteria, the Fed’s plan to provide $200 billion to the financial services sector should mean more lending money available at lower interest rates, according to Standard & Poor’s Chief Economist David Wyss.
MORTGAGE FRAUD - A lie isn’t effective if you get caught, so more lenders now rely on technology to verify mortgage applications. Miami-based Verification Bureau, for example, can check reported income against income tax records thanks to a deal with the IRS. Up to 30 percent of loan application Social Security numbers fail to confirm.
PROPERTY MANAGEMENT - In some areas, renting can be almost as risky as owning. Plenty of homes and condos are available because their owners can’t sell them, but tenants can be kicked out despite having a lease if banks foreclose on the property owner.
Bonita Springs Condo Market Update February 08
The condominium market in the Bonita Springs is showing the subtle changes similar to the Naples market, as the number of condos being put on the market are decreasing from previous years and pending sales increasing from the same month in the two previous calendar years.
New Listings: During the month of February 154 Bonita Springs condos were placed on the market. In 2007, 203 units were listed and 274 in 2006. February was the third consecutive month where the number of new listings was less than the same month in previous years. When the number of new listings coming on the market is declining it is a sign of a subtle change in the real estate market. An improvement in a real estate market starts with the new listings, as it is the start of the natural real estate cycle. The absorption rate for new listings is 5.7 versus 6.2 and 8.3 in 2007 and 2006 respectively. The absorption rate represents an approximate timeframe for new listings to sell within. A balanced market is usually around 6.0 months. When the rate dips below 6.0, it favors sellers, while above 6.0, it favors buyers.
Pending Sales: 62 condominiums in Bonita Springs went under contract during February. This compares favorably with the 52 in 2007 and 60 units in 2006. The pending sales in January were 43, and 20 in December. Pending sales leading to future closed sales within a 30 to 60 day period from the date when a contract is mutually agreed to by both the buyer and seller. When pending sales increase, eventually the increase will be seen in the number of closed sales.
Closed sales: In the month of February, 27 condos were sold, compared to 33 condos in both 2007 and 2006. In January 25 were closed, while in December a total of 26 condominiums closed.
Median Prices: The median price paid for a condominium in Bonita Springs during February was $322,000. In a year over year analysis this represents a decrease of about 6.7% from $345,000 in 2007 and cumulative decrease of 33.5% from 2006’s median price of $430,000.
Short Sales The MAGIC Pill - Are They?
There many real estate agent professionals touting the short sale as the MAGIC pill for property owners as a cure all for any situation from loans based upon dishonest income information (stated income loans – “liar loans”) to real estate investors that are not realizing the profits they anticipated.
People are always looking for the MAGIC pill to solve their problems or shortcomings. We look for the magic pill to lose weight or increase our incomes. Over the past few years the magic pill was finding a property, maybe the wrong one, and finding a loan or mortgage to finance the purchase, maybe the wrong loan program. Now, the MAGIC pill is the short sale.
A short sale historically has been used to assist borrowers with a financial hardship caused by a change in their financial situation. Changes in financial situations involve – loss of job, loss of a spouse’s income, hospitalization, job relocation, etc. A short sale means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales. Banks and lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.
Real estate investors may not qualify for a short sale, because they were investing. Investing does not guarantee a profit; it has inherent risks associated with it. Hence, banks and lenders may be more reluctant to be receptive to a short sale for a real estate investor.
Two recent cases come to mind immediately and are used to show how the MAGIC pill was used and proved unsuccessful.
Case #1 - A Bonita Springs real estate agent recently expressed on her blog the frustration of the short sale process when representing a buyer and the lender’s lack of cooperation trying to complete a short sale. Major points discussed - settling on a price for the property, needing an additional document, and at the end the bank requesting the seller pay $3,000 in closing costs.
Case #2 - A Naples real estate agent, expressed frustration with the process and the lender’s lack of cooperation in accepting an offer. An offer was presented to the bank for $175,000 on a home with a list price of $180,900. The bank declined to approve the contract. He could not understand why it was not approved since the offer was so close to the list price.
There are others expressing their frustrations as well but these are the most recent within the past few days, coming to my attention.
The short sale process is difficult to maneuver through the maze of research and documentation, in addition to lenders or holders of the mortgage can be hard to deal with. But this does not have to be the case if a buyer or seller has a team composed of qualified professionals in real estate, real estate law, and income taxes. In some situations alternatives to the short sale can be discussed and save the home owner the emotional distress of losing their home. In other cases it might be possible to determine the chances of having a successful short sale for the seller or short sale purchase for the buyer.
Why the short sale MAGIC pill failed in the above cases:
- Listing agent and seller establishing too low of a list price without due consideration towards the bank or lender. Questions – Did the seller and buyer really negotiate or was it just the seller approving the offer and contract? Was a comprehensive Broker’s Price Opinion or Comparative Market Analysis completed prior to listing and included with the package to the bank or lender?
- Inadequate research or counseling to determine if additional resources were available from the sellers.
In Case #1, the seller may not have been making payments on the loan. Did the $3,000 represent the payments not made? Did the seller use the monies for other purposes – paying down credit card or other loan balances?
Case #2, some quick research showed individual was a real estate investor with the possibility of significant equity in other real estate holdings. Does the seller expect the bank or lender to settle for less than owed when there are assets or resources to cover the deficiency?
- In Case #1, a document was not initially furnished to the bank or lender. The document was a preliminary settlement sheet (closing statement or HUD-1); in a real estate transaction it is called a seller’s net sheet. The net sheet is done at time of listing. It is done once again when an offer is presented and through-out the negotiation process.
Short sales can be a win-win-win situation for sellers, buyers and financial institutions if handled by knowledgeable real estate agents, real estate attorneys and income tax advisors.
The challenge for both sellers and buyers is to find the right professional team. The search usually starts with finding a real estate agent, rather than a real estate attorney, due to what is perceived as a cost savings. If you are starting with a real estate agent look for the following characteristics or skill sets:
- Some type of business background – accounting, finance, credit and collection, basic income tax understanding.
- Ability to review and explain the closing documents signed at a closing.
- Can explain without a computer program closing costs for both a buyer and seller.
- Ability to analysis cash inflow and outflow.
- Research techniques to discover important aspects not readily available.
- A list of real estate attorneys and income tax professionals.
In another post it will be explained why these characteristics and skill sets are important to both sellers and buyers when considering entering the area of short sales.
Blog Makes Top 100 Real Estate Blogs
Today, I was very surprised to find this blog to ranked in the Top 100 Real Estate Blogs as per Top 100 Real Estate Blogs.
The ranking is determined by Google Page Rank, Technorati Rank, and Alexa rankings.
The blog is entitled Bonita Springs Real Estate News and Market Updates and does cover the communities of Estero and Naples as well.
Thank you - Top 100 Real Estate Blogs.