Archive for the 'Trends' Category

PANIC IN THE ECONOMY: IS THE SKY FALLING?

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The Economy: Why All the Panic? For the last couple of weeks, all we have heard is how bad the current economic situation is. The markets are going to crash and interest rates are going to skyrocket. Panic has definitely engulfed the entire country. Consumer confidence, as measured by the University of Michigan’s Consumer Sentiment Survey, has fallen to a number not seen in thirty years. This panic has actually had a negative impact on the economy. It was said best by Mark Zandi, chief economist at Moody’s Economy: “Confidence normally reflects economic conditions; it doesn’t shape them… Yet at times, particularly during economic turning points, cause and effect can shift. Sentiment can be so harmed that businesses, consumers and investors freeze up, turning a gloomy outlook into a self-fulfilling prophecy. This is one of those times.” What does the data actually show? We decided to look at certain economic indicators and compare them to the numbers from a year ago. Here is what we found: We are not making the argument that the current numbers are worth celebrating. We are only suggesting that the sky is not falling. Bottom Line Conditions aren’t as dire as some are professing. Make good sound financial decisions based on your own economic conditions. There is no need to panic. (Courtesy of Keeping Current Matters, KCM Blog.  I always appreciate their insight!)

SOUTH FLORIDA INVENTORY DECLINING

South Florida residential inventory.

August 16, 2011 03:00PM

Compiled by Condo Vultures Realty using the South Florida Shared Multiple Listing Service. Active listings are properties where no current sale contract exists; pending sales are properties in which a contract for sale has been executed, but not yet closed. Listing brokers control the status of a property listing. — Katherine Clarke

(VIA THE REAL DEAL)

4 IDEAS to Spur New Home Sales

4 Ideas To Spur Home Sales

A new Home Buyer Tax Credit is unlikely.  Interest rates can’t go much lower.  So, how can a market where buyers who are afraid of losing their jobs begin to digest the massive quantity of current and shadow inventory without another major correction in pricing?  Here are four “outside the box” ideas that deserve consideration:

1.  Home SELLER Tax Credit!

With homes as affordable as they have ever been, why are we contemplating giving more to the buyer than low prices, amazing selection and low rates?  Seems to me we need a way to help sellers.  Whether they are underwater or not, why not incent them with a $8000 tax credit beyond any existing incentives available.  For some, it will give them money to “start over”; for others, it will enable them to correct their asking price to get their home sold.  In short sale scenarios, their current bank needs to approve the price anyway, so, this money won’t negatively impact home values further.  Today, sellers need help more than buyers, let’s help them.

2.  Make every mortgage assumable (without recourse).

Let buyers buy with minimal closing costs by assuming the existing mortgage at the existing interest rate.  (A WIN for a buyer!)  In short sale situations (which are really the only time someone would do this), a new appraisal is done and the loan is reduced to 100% of the value.  The bank is likely losing principal, but the existing rate is likely higher than they would get on a new loan.  (A WIN for the bank because they have a new, qualified borrower at a higher than market interest rate!)  The seller can be released of their liability (without any 1099) and potentially without too severely damaging their credit score. (A WIN for the seller!)

3.  Reinstate the Down Payment Assistance Program that has been on hold with FHA.

In essence, with this program the seller funds the down payment for the buyer.  Previously, a seller would make a gift to a HUD-approved not-for-profit out of the proceeds of the sale.  Said not-for-profit would gift monies to a buyer at the closing table to be used for their down payment (keeping a small administrative fee for themselves).  The program was suspended because of higher default rates.  Industry experts believe that if we install more stringent guidelines on credit scores, income ratios, and/or required reserves, that default rates will be acceptable.  Since accumulating cash is a major hurdle for home buyers today, this idea makes sense, and is even more needed with the proposed reduction of seller’s concessions towards the buyer’s closing costs.

4.  Have the Fed Buy Mortgage-Backed Securities for Investment Property Loans with only 20% Down Payments at Competitive Rates.

There aren’t enough first-time homebuyers who are secure in their job situation, and qualify for mortgages to buy all the homes we need sold.  And now that prices are so attractive, if we can make mortgage rates more affordable and cash needed to close lower for investors, we can attract more potential purchasers to the table.

In order to stabilize prices (and eventually have appreciation again) we need to decrease supply and increase demand.  I believe some of these ideas (which likely can be tweaked for improvement by smarter people than me) provides some solutions.  But, I’d love to hear what everyone else thinks.

(content courtesy of KCM)

Miami Beach Housing Market

The housing market in Miami Beach is definitely improving.  I’m sure most real estate agents are still feeling pinched, but if you look at the stats below, it’s plain and simple what’s going on here.  Check out what’s going on with the available (for sale), and the sold and pended properties.  The % change for closed and pended sales is way up, while the inventory of for sale homes is down over 11%.  Things are headed in the right direction.

1 month 1 year 15 months June 09 July 09 % Change July 08 July 09 % Change May 08 July 09 % Change For Sale 424 407 -4% 445 407 -8.5% 461 407 -11.7% Sold 24 21 -12.5% 13 21 61.5% 11 21 90.9% Pended 28 32 14.3% 11 32 190.9% 17 32 88.2%

Miami Homes for Sale — Dirt Cheap!

During the real estate boom years, “dirt cheap” was almost an oxymoron. Miami homes for sale in the recent past were priced so high that even the land they were sitting on was out of reach for the common mortal. Yet, people couldn’t get enough.  Buy Buy Buy. Well, bye bye bye to those times  is more like it.  Don’t get me wrong. There are houses that are put on the market and move quite quickly today; it’s either because of their extremely attractive appearance and location, or their extremely attractive price.

Earlier this month, I was showing an effervescent couple some homes and we came upon this bank owned property.  It’s an unusual house with a history that exemplifies the volatile housing market. On Februay 2, 2006, it was listed for sale at $788,000 .  It sits one block from the bay and is surrounded by million dollar waterfront properties.  Only two months later, on April 7, 2006, it closed for a whopping $840,000.  Today it sits abandoned and badly neglected.  The asking price?  $263,500. And sitting there.  Amazing what a little time will do.  My effervescent couple was truely interested in this property and a couple other bargain priced listings, but unfortunately one of them lost their job due to the all emcompassing sour economy. Who knows, perhaps it will still be sitting there when they are ready to jump back in for these dirt cheap prices.  It needs alot of work, but the price reflects that.  I will be sure to show it to the next person that wants a property for the price of the dirt it’s sitting on.  If you are interested, please don’t hesitate to give me a call @ 305-764-8959

Average Price Per Square Foot in Miami

Here is the chart for the average price per square foot for a home in the Miami and Miami Beach area.   We can  see there is a decline throughout this past year.  I’m sure most of that can be accounted for the distressed properties that have been sold with the firesale prices.  A lot of otherwise great neighborhoods are being unfairly affected because of the distressed properties.

Distressed sales, which today comprise about 50 percent of transactions nationwide, are creating market distortions in otherwise stable neighborhoods. These are only capturing transaction prices.  These  prices might be 20 percent to 25 percent below actual values. For that reason, it’s possible that widely cited projections that a third or more of homeowners are underwater might be inaccurate.

Ten Steps to Negotiate an Affordable Loan Modification

Today I drove around showing customers lots of listings in Miami Beach and Miami.  There were open houses in Miami Shores, Morningside, and Belle Meade.  We stopped in.  There were multiples of people in each one.  This is a great sign that things are picking up.  The market is getting busy again.  That’s good for people who can move and want to move but what about those that can’t afford to move or don’t want the hassle of trying to get out of their home in a short sale process?  It’s not exactly a perfected science yet.  For those who want to stay in their house and change their payments, especially if they are upside down, or owe more than they house is worth, a  little guidance in modifying their loan might help. Here are some helpful tips to get that loan modified to be more affordable:

1. Come Clean…

2. Understand Your Lender’s Point of View…

3. Keep a Cool Head…

4. Give Them What They Need…

5. Ask For What You Want…

To see the rest of the list with a full explanation of each step just click here for the Ten Steps in Negotiating an Affordable Loan Modification.

Please contact me with your questions or comments.  I’d be delighted to hear from you.  I’d be happy to send you in the right direction for additional guidance.

Florida Existing Home Sales Up!

This is taken directly from the Florida Association of Realtor’s Early Bird News Daily Briefing I received on March 23, 2009:

Florida’s existing home sales rose 20 percent in February – the sixth consecutive month that sales activity showed increases in the year-to-year comparison, according to FAR.  Statewide sales of existing condos increased 15 percent last month compared to the previous year; and February’s statewide sales also were higher than January’s figures in both the existing home and existing condo markets. To read the full story, just click here

Market Trend for Single-Family Homes in Miami, Florida

Good News! Single Family homes in Miami-Dade County are getting sold.  The inventory of homes in Miami-Dade county dropped 12.9% for the year period of February 2008 to February 2009.  Moreso, the number of homes sold in Miami-Dade increased 42.7% and the number of pending sales increased a HUGE 117%.

Inventory of single family homes during February 2008 compared to February 2009

• For sale:  15,963 as compared to 13,896 (down 12.9%)
• Sold:        342 as compared to 488 (up 42.7%)
• Pended:   505 as compared to 1096 (up 117%)